GBP/USD climbs to daily highs near 1.2650 on broad-based USD weakness

• Greenback comes under pressure following the dismal PMI data.
• Markets ignore Brexit headlines.
• US Dollar Index stays in lower-half of daily range.

After spending the Asian session consolidating yesterday’s losses above the 1.25 mark, the GBP/USD pair gained traction in the second half of the day and advanced to a daily high of 1.2648. As of writing, the pair was up 0.3% on the day at 1.2643.

The heavy selling pressure that the greenback encountered in the NA session seems to be the primary driver of the pair’s recovery. Following the dismal December ISM Manufacturing PMI data, the US Dollar Index, which tracks the dollar’s value against a basket of six major rivals, slumped to a daily low of 96.20. Additionally, the 10-year T-bond yield lost 3% to touch its lowest level in a year to force the buck to stay weak in the session.

On the other hand, according to a recently published Buzzfeed report, the British Prime Minister Theresa May’s allies think that the Parliament is likely to vote down the Brexit deal on January 15. Earlier today, following his meeting with May, DUP’s deputy leader Nigel Dodds stated that the DUP’s principled objections to the EU Withdrawal Agreement remained.  

• DUP’s Dodds: Party’s principled objections to the EU Withdrawal Agreement remains.

There won’t be any macroeconomic data releases from the UK on Friday and markets will be waiting for the NFP report from the U.S.  

Technical levels to consider