- Manufacturing PMI figures from US on Monday beat expectations.
- US Dollar Index continues to push higher toward the 97 mark.
- Business activity in the UK’s manufacturing sector continues to contract.
After closing the previous week with small losses, the GBP/USD pair continued to push lower on Monday and fell to its lowest level since June 19 at 1.2633. As of writing, the pair was down 0.4% on a daily basis at 1.2643.
Earlier today, the IHS Markit reported that the business activity in the UK’s manufacturing sector contracted at a stronger pace than initially anticipated with the Manufacturing PMI slumping to 48 from 49.4 in May and weighed on the British pound. Commenting on the data, “The manufacturing downturn is deepening, with a second month in contraction and production shrinking at the steepest rate for seven years,” noted Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply.
In the second half of the day, the greenback, which took advantage of the rising US Treasury bond yields on the back of the U.S. and China restarting trade talks to start the week on a positive note, gathered further strength and the US Dollar Index rose to a 10-day high of 96.72.
The data published by the IHS Markit and the ISM both revealed that the manufacturing sector in the U.S. continued to expand in June to provide an additional boost to the dollar. In the absence of any other macroeconomic data releases in the remainder of the day, the greenback’s market valuation is likely to continue to drive the pair’s price action.
Technical levels to watch for
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