Fed cut hopes are weighing on the USD
These figures together with the unexpectedly weak US Services data seen on Wednesday have restored investors confidence that the Fed might start cutting rates in June. This has improved risk appetite, capping the recovery of US Treasury yields and pushing the US Dollar lower.
Earlier this week, UK data showed that manufacturing activity expanded for the first time in the last two years. This has improved the outlook in the country’s economy, providing a fresh impulse to the Sterling.
The technical picture remains bearish, with the pair approaching an important support area at 1.2675-1.2695. Above here, the next target would be 1.275 and the March 21 high AT 1.2800. Supports are 1.2570 and 1.2535
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