GBP/USD remains stuck around multi-month high ahead of UK PMI data

• GBP/USD edges lower as gains seemed to pause near the 1.3950 level. 
• US dollar rebounds from the early dip exert pressure on the pair.
• Sterling remains grounded on positive vibes from Brexit chaos, PMI data eyed.

The appreciative move in the US dollar keeps GBP/USD under pressure. The pair lacks the strength to move higher and confides in a 20 pips movement. 

At the time of writing, the GBP/USD pair is trading at 1.3930, down 0.12% for the day.

The US Dollar Index (DXY), which tracks the performance of the US dollar stands higher at 91.85 with 0.11% gains. The greenback diverges with the US 10-year benchmark yields, which read at 1.46% with 0.60% losses.

Investors digested the surprise move from the Fed in the previous week as inflation fears seemed to be eased now. Fed Chair Jerome Powell on Tuesday reassured that the central bank is committed to economic well being. The focus is on the broad recovery of the job market while he acknowledges rising inflation.

Meantime, US Existing Home Sales data fell for the fourth straight month to 5.8 million in May compared to market expectations at 5.72 million.

On the other hand, the sterling remained unfazed by the reports that COVID-19 restrictions could end on July 19 as the British Health Minister Matt Hancock remained confident on the corona cases related data. 

On the economic side, the Confederation of British Industry’s Order Book Balance rose to 19 in June, slightly above the market expectations at 18. This is the highest level since May 1988.

Meanwhile, the UK and EU officials remained optimistic about resolving the post-Brexit trade war. The EU has been reviewing the UK’s formal written request on the extension of the grace period beyond 30th June on the ban of the sale of chilled meat and sausages into Northern Ireland as per the protocol.

As for now, investors are closely watching for the UK and US PMI  data to gauge the market sentiment.

GBP/USD additional levels