British Pound sticks to intraday losses vs bullish USD after downbeat UK PMIs
- GBP/USD attracts fresh sellers on Tuesday amid the deepening UK political crisis.
- Disappointing UK PMIs exert additional pressure on the pair amid a bullish USD.
- The Iran uncertainty and the hawkish Fed push the USD to over a one-year high.
The GBP/USD pair adds to its modest intraday losses and touches a fresh daily low, around the 1.3215-1.3210 region during the first half of the European session. Moreover, the fundamental backdrop seems tilted in favor of bearish traders and suggests that the path of least resistance for spot prices remains to the downside.
The British Pound (GBP) meets with a fresh supply in the face of the deepening UK political crisis following Prime Minister Keir Starmer's resignation amid mounting pressure from the Labour Party. Adding to this, the disappointing release of the flash UK PMIs exerts additional pressure on the GBP, which, along with sustained US Dollar (USD) buying, contributes to the offered tone surrounding the GBP/USD pair.
In fact, S&P Global's monthly survey signaled a second consecutive month of contraction in the UK business activity, with the Composite PMI falling from 49.7 to 49.4 in June, or its lowest level in 14 months. The fall was primarily driven by weakness in the services sector. The Services PMI declined to 48.7, its lowest in 41 months, offsetting a rise in Manufacturing PMI to 53.6, or the strongest level in nearly two years.
This comes on top of softer UK consumer inflation figures released last week and forces traders to further scale back their bets for a rate hike by the Bank of England (BoE). Adding to this, the US-Iran peace deal eased concerns about the energy shock, endorsing the view that the BoE will hold rates steady in the coming months, which should continue to undermine the GBP and favor the GBP/USD bears.
Meanwhile, the BoE policy expectations mark a significant divergence in comparison to the US Federal Reserve's (Fed) hawkish signal that it will need to raise policy rates this year if inflation remains sticky. This, along with persistent uncertainties about the sustainability of the US-Iran peace, lifts the USD to a fresh high since May 2025, which further validates the near-term negative outlook for the GBP/USD pair.
Economic Indicator
S&P Global Services PMI
The Services Purchasing Managers Index (PMI), released on a monthly basis by S&P Global, is a leading indicator gauging business activity in the UK’s services sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the Pound Sterling (GBP). Meanwhile, a reading below 50 signals that activity among service providers is generally declining, which is seen as bearish for GBP.
Read more.Last release: Tue Jun 23, 2026 08:30 (Prel)
Frequency: Monthly
Actual: 48.7
Consensus: 50
Previous: 49.3
Source: S&P Global
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