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  • Consumer confidence improves in the U.S.
  • US Dollar Index fails to capitalize on upbeat sentiment data.
  • UK political headlines make it hard for the GBP to find demand.

The GBP/USD pair started the week under a modest pressure and posted losses on Monday despite the fact that both the UK and the US markets were closed. With markets struggling to find a significant enough catalyst, the pair’s trading range remains tight on Tuesday. As of writing, GBP/USD was down 0.08% on a daily basis at 1.2670.

Today’s data from the U.S. revealed that the consumer sentiment improved in May with the Conference Board’s Consumer Confidence Index rising to 134.1 from 129.2 and beating the analysts’ estimate of 130. Although the initial reaction helped the greenback gather strength, the currency struggled to preserve its momentum after the Dallas Fed Manufacturing Index slumped to -5.3 in May from 2 in April. The US Dollar Index was last seen adding 0.1% on a daily basis at 97.82.

On the other hand, the latest political headlines from the UK failed to revive Brexit optimism and caused markets to ignore the British pound. British Trade Minister Fox earlier today said that it would be unfortunate if the EU didn’t want to negotiate changes to the Brexit deal. Earlier in the day, PM May’s spokesman reiterated that no-deal Brexit was still the “legal default.”

There won’t be any macroeconomic data releases from the UK on Wednesday and the USD’s market valuation is likely to remain as the sole driver of the pair’s price action.

Key levels to watch for