Ella 
In early Asian trading on Tuesday, GBP/USD remained on the defensive, near 1.2545. The U.S. dollar index rose above the 105.00 mark, and U.S. Treasury yields moved sharply higher after the U.S. ISM PMI improved overnight, which was bearish for the GBP/USD pair.
The U.S. ISM Manufacturing Purchasing Managers’ Index (PMI) data unexpectedly expanded in March, rising to 50.3 from 47.8 in February, higher than the expected 48.4. The indicator hit its highest level since September 2022 and marked the first time manufacturing activity expanded since October 2022. A PMI reading above 50 indicates that the manufacturing economy is generally expanding, while a reading below 50 indicates that factory activity is generally declining. The dollar attracted some buying amid stronger-than-expected U.S. economic data.
The Bank of England maintained a dovish stance in its latest monetary policy statement, which put some selling pressure on the pound. Bank of England Governor Andrew Bailey said market expectations for two to three interest rate cuts this year were “reasonable”, adding that the Bank of England was not seeing many signs that inflation remained sticky. The comments stoked expectations that the Bank of England will cut interest rates in June and weighed on GBP/USD.
