FX

GBP/USD eyes to recapture 1.2600 on positive market mood, FOMC eyed

  • The soaring market mood has underpinned pound against the greenback.
  • GBP/USD is aiming to recover Tuesday’s losses ahead of the FOMC minutes.
  • The US Manufacturing PMI remained at par while Services PMI tumbled sharply.

The GBP/USD pair has rebounded gradually from a low of 1.2475 as positive market sentiment has underpinned the risk-sensitive currencies. The cable witnessed a steep fall on Tuesday after failing to overstep the round level resistance of 1.2600. The asset was offered on Tuesday amid poor S&P Global Purchase Managers Index (PMI) numbers. A severe underperformance was displayed on the economic data front by the UK as the Services PMI landed at 51.8 vs. 57.3 as expected while the Manufacturing PMI was recorded lower at 54.6 vs. 55.1 forecasts.

Meanwhile, the US dollar index (DXY) is oscillating in a minor range of 101.74-101.79 in early Tokyo after a two-day losing streak. The asset has displayed a bearish reversal after establishing below the crucial support of 102.35. Failing to sustain at 19-year high levels of 105.00, the asset has surrendered more than 3% gains in the past eight trading sessions. The IHS Markit reported an at par performance by the US on the PMI data front. The Manufacturing PMI landed at 57.5, in line with the forecasts while the Services PMI remained lower at 53.5.

Now, investors are focusing on the release of the Federal Open Market Committee (FOMC) minutes, which will dictate the strategic development behind the announcement of the 50 basis points (bps) interest rate decision by the Federal Reserve (Fed).

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