GBP/USD consolidates around 1.2560 as investors await PMI numbers, Fed’s Powell eyed

• GBP/USD is expected to remain subdued as DXY steadies ahead of Fed’s Powell.
• Hawkish guidance should be expected from Fed’s Powell.
• The US and UK PMI numbers will keep investors busy in today’s session.

The GBP/USD pair is oscillating in a narrow range of 1.2560-1.2593 in the early Tokyo session as investors are awaiting the release of the Purchase Managers Index (PMI) numbers from the UK and the US. The cable has remained stronger over the past few trading sessions amid a rebound in the risk-on impulse, which has strengthened the risk-sensitive currencies and has diminished the safe-haven's appeal.

The US dollar index (DXY) is performing a little stable on Tuesday after a bloodbath Monday. The DXY slipped sharply to near 102.00 on an upbeat market tone. Now, investors are focusing on the release of the S&P Composite PMI numbers. The Composite PMI is seen lower at 55.5, against the prior print of 56. From a bifurcation view, the Manufacturing and Services PMI are expected to land at 57.9 and 55.4 against the previously recorded figures of 59.2 and 55.6 respectively.

Apart from the US PMI data, the speech from Federal Reserve (Fed) chair Jerome Powell will remain in limelight. The guidance from Fed Powell over the likely monetary policy action by the Fed will facilitate investors to take measured decisions in the cable. Most likely, the tone from Fed’s Powell will remain hawkish as soaring inflation needs to be contained quickly.  

On the UK front, S&P Global/CIPS Manufacturing and Services PMI are seen at 55.1 and 57.3, lower than the previously recorded figures of 55.8 and 58.9 respectively.