GBP/USD Is Still Cautious below 1.2550 Due to a Strengthening US Dollar and Positive US PMI Data
GBP/USD encounters resistance near 1.2545 due to the strengthening US dollar. Unexpected expansion occurred in the US ISM manufacturing data for the first time in nearly 18 months. As a result of the Bank of England's (BoE) dovish posture, the GBP falls against the USD.

The GBP/USD pair maintains a defensive stance near 1.2545 during Tuesday morning's Asian trading session. In the wake of optimistic US ISM data, the US Dollar Index (DXY) surpasses 105.00 and US Treasury bond yields increase significantly overnight, presenting a headwind for the GBP/USD pair.
The ISM Manufacturing PMI for the United States unexpectedly increased in March, from 47.8 in February to 50.3, exceeding expectations of 48.4. The recorded value signifies the most elevated level of manufacturing activity since September 2022, and it represents the initial expansion since October 2022. A reading in excess of 50 signifies a general expansion of the manufacturing economy, whereas a measurement falling below 50 indicates a general decline in factory activity. As a consequence of the data exceeding expectations, the US Dollar (USD) garners interest from a wide range of purchasers.
The recent dovish monetary policy statement from the Bank of England (BoE) has generated selling pressure on the Pound Sterling (GBP). Governor Andrew Bailey of the Bank of England stated that market expectations for two to three rate cuts this year are "reasonable," adding that the central bank of the United Kingdom is not observing much tenacious persistence. These remarks incite anticipations that the BoE will reduce interest rates in June, which depreciates the GBP relative to the USD.
The UK Nationwide Housing Prices and S&P Global/CIPS Manufacturing PMI for March are scheduled to be released later on Tuesday. Additionally, Governor Michelle Bowman, Loretta Mester, John Williams, and Mary Daly, among other Federal Reserve (Fed) officials, are scheduled to deliver speeches on Tuesday.
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