GBP/USD remains depressed below 1.4180 ahead of UK PMI data
|- GBP/USD extends the consolidated moves on Thursday.
- Lower US Treasury yields undermine the demand for the US dollar.
- GBP remains grounded on upbeat economic outlook.
The GBP/USD pair remains muted in the Asian session on Thursday. The pair trades in a very restricted manner with no meaningful traction.
At the time of writing, GBP/USD trades at 1.4168, down 0.02% for the day.
The US dollar index (DXY), which tracks the greenback performance against its six majors confined in known price territory since the previous week. As of writing, the DXY was trading at 89.38 up 0.04% ahead of the important economic data.
The recent manufacturing PMIs showed US factory growth beat market expectations despite labor supply constraints and elevated pricing pressure.
Meanwhile, the Philadelphia Fed Bank President Patrick Harker said on Wednesday that as the US economy continues to recover from the Covid-19 crisis and the labor market rebounds, it may be time for taper talks. This, in turn, did little to add spark to the US dollar.
On the other hand, Sterling continued to remain strong on the expectation of stage four reopening of the economy on June 21, despite the threat of new corona strain, first detected in India. The UK economy would be the fastest growing economy among developed economies, the Organisation of Economic Cooperation and Development revealed in their latest forecast.
Lately, the Brexit chaos limits the gains for the cable. In the latest development, the Vat tax has been axed on low value imports by Germany on all non-EU countries, including the UK. Small UK firms find it difficult to do business in Europe post-Brexit.
It is worth noting that the Bank of England (BOE) said it monitors the UK housing boom as it weighs the inflation risk. The data released on Tuesday showed, the UK Annual House Price jumped to 10.9% in May, the highest since August 2014, and well above the market expectations of 9.2%.
As for now, traders are keenly waiting for UK PMI data, US Initial Jobless Claims, US PMI data to gauge the market sentiment.
GBP/USD Additional Levels
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