GBP/USD extends its slide toward 1.2300 and trades at a fresh five-month low in the second half of the day on Monday. The cautious market stance helps the US Dollar stay resilient against its rivals and weighs on the pair ahead of Tuesday’s key PMI data.
GBP/USD faced downward pressure on Friday during the American trading session, dipping below 1.2400 and ending the week on a negative note. The pair remained above 1.2350 early on Monday but struggled to gain momentum for a recovery, despite a positive shift in market sentiment.
Bank of England (BoE) Deputy Governor Dave Ramsden remarked on Friday that the risks to persistent inflation pressures in the UK were diminishing. When asked about the Federal Reserve’s rate outlook, Ramsden highlighted differences in the fundamentals of US and UK growth dynamics, indicating that the BoE would act according to its mandate, regardless of the Fed’s decision on interest rates in June.
These comments suggest that the BoE may not delay a policy adjustment even if the Fed chooses to keep rates unchanged.
Monday’s economic calendar lacks major data releases. Market participants will focus on Tuesday’s preliminary Services and Manufacturing PMI data from both the UK and the US.
Meanwhile, the UK’s FTSE 100 rose by over 1% on the day, and US stock index futures traded positively. If this risk-on sentiment continues in the latter half of the day, GBP/USD may find support.