In the second half of the day, the GBP/USD pair reversed its trend.
On Tuesday, the US Dollar Index rose beyond 92.50.
The USD is finding demand in a risk-averse market environment.
The GBP/USD pair came under sustained bearish pressure in the second half of the day after moving upward above 1.3900 throughout the European session, and was last seen shedding 0.26 percent at 1.3809.
The increased strength of the dollar in the American session appears to be dragging on the GBP/USD pair. The recent downturn in market sentiment is assisting the USD in finding demand as a safe haven asset. The US Dollar Index (DXY) is currently trading at 92.52, up 0.3 percent. The Dow Jones Industrial Average and the S&P 500 indices are down 1.3 percent and 0.75 percent, respectively, reflecting the risk-averse climate.
Earlier in the day, the Institute for Supply Management (ISM) released statistics showing that business activity in the US service sector expanded in June, with the PMI reaching 60.1. This reading, however, was lower than May’s figure of 64 and fell short of market expectations of 63.5.
On the other side, the Markit Construction PMI improved to 66.3 in June from 64.2 in May, according to data released on Tuesday in the United Kingdom. Nonetheless, this information had little to no impact on the performance of the British pound against its key competitors.
There will be no US data releases for the rest of the day, therefore the USD’s market valuation will likely continue to influence GBP/USD movement./n
