Ella 
GBP/USD is trading around 1.2650 in London on Monday after a sharp sell-off last week. As the upside move in the US Dollar Index (DXY), which tracks the value of the US dollar against six major currencies, has appeared to have paused, the GBP/USD pair has rebounded and is struggling to extend upside above the immediate resistance of 106.00.
However, the near-term outlook for the US dollar has improved after the preliminary S&P Global Purchasing Managers’ Index (PMI) report for June showed that manufacturing and services sector activity expanded at an unexpectedly faster pace than expected. The report showed that the composite PMI unexpectedly jumped to 51.7. Investors expected the PMI reading to fall to 51.0 from the previous reading of 51.3.
The report also boosted the sentiment of Federal Reserve (Fed) policymakers, saying: “Meanwhile, sales price inflation cooled again after rising in May, falling to one of the lowest levels in the past four years. Historical comparisons suggest that the latest decline brings the survey’s price measure in line with the Fed’s 2% inflation target.”
