GBP/USD drops to mid-1.2200s on dovish BoE commentary

• GBP/USD pushes lower for second straight day on Thursday.
• BoE policymaker Saunders prefers easing too much rather than too little.
• US Dollar Index stays relatively quiet near 99.00 ahead of key data releases.

The GBP/USD pair rose toward 1.2300 during the early trading hours of the European session but reversed its direction following some dovish commentary from Bank of England (BoE) policymaker Michael Saunders. As of writing, the pair was unchanged on a daily basis at 1.2250.

Saunders argued that it was less risky to ease the policy too much in the current environment rather than too little. Regarding the possible use of negative interest rates, “I would not rule out negative rates, that does not mean I would necessarily rule it in,” Saunders said. Finally, Saunders explained that the BoE was watching the exchange rate and that it was a factor in policy decisions.

Focus shifts to US data

Meanwhile, the US Dollar Index is staying relatively quiet near 99.00 on Thursday as investors are waiting for key macroeconomic data releases from the US. 

In addition to the weekly Initial Jobless Claims, the Durable Goods Orders and the preliminary first-quarter GDP growth data will be looked upon for fresh catalysts. Previewing the Durable Goods Orders report, “markets have already absorbed the most dire economic news and durable goods will add little of importance to the picture,” said FXStreet analyst Joseph Trevisani. “The details of the March-April catastrophe will not keep the market from moving on.”

Technical levels to watch for