GBP/USD surpasses 1.2600 as DXY slips, US GDP in focus
- GBP/USD has overstepped 1.2600 as DXY weakens ahead of US GDP numbers.
- The DXY has failed to capitalize upon the hawkish FOMC minutes.
- Risk-on impulse is underpinning the risk-perceived currencies.
The GBP/USD pair has managed to surpass the weekly resistance of 1.2600. A firmer upside move in the opening trade by the US dollar index (DXY) has weakened the pound bulls. The pair has remained stronger this week as the greenback was underperforming against the pound amid a risk-on market mood.
The risk appetite of the market participants has improved significantly as the global economy has discounted two more 50 basis points (bps) interest rate hikes, which is likely to be announced by the Federal Reserve (Fed) this year. The DXY has tumbled below 102.00 after printing a 19-year high of 105.00 on May 13. The asset has erased more than 3.20% from its recent high.
On Wednesday, the DXY witnessed some gains after the release of an extremely hawkish Federal Open Market Committee (FOMC) minutes. The minutes from the FOMC dictated that all members were in favor of a 50 bps interest rate hike and they believe that a couple of more similar hikes are appropriate to bring price stability.
In today’s session, investors will focus on the release of the US Gross Domestic Product (GDP). The annual GDP numbers are expected to remain stable at -1.4%.
In the pound zone, the UK delivered a poor show on the PMI front. 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.