GBP/USD struggles near two-day low

The pound fell against the dollar for the second day in a row on Thursday, thanks to broad-based USD strength. Although there were conflicting readings on the UK PMI, bullish traders were unimpressed and did not give any support for the majors. For the most of the first half of the European day, the GBP/USD pair maintained its offered tone and had a rather quiet response to mixed UK manufacturing PMI data. The pair was last seen trading slightly above the mid-1.3100s, representing a loss of approximately 0.35 percent for the day.

"The pair extended the previous day's sharp retracement slide from the vicinity of the 1.3300 mark, or over two-week high and witnessed some follow-through selling for the second straight day on Thursday. The downtick was exclusively sponsored by a stronger US dollar, which continued drawing support from the Fed's hawkish outlook."

The views of important FOMC members, including Fed Chair Jerome Powell, have fueled speculation that the Fed may take a more aggressive policy approach to battle rising inflation in the near future. The markets reacted quickly and began pricing in the potential of a 50 basis point rate rise at the Federal Reserve's forthcoming meeting in May.

"This was reinforced by elevated US Treasury bond yields, which were further underpinned by concerns that surging crude oil prices could put further upward pressure on already high consumer prices. "

The pound, on the other hand, was under pressure as a result of a dovish evaluation of the Bank of England's policy decision last week, as well as the central bank's position on the necessity for further rate rises. Despite an unexpected increase in the UK Services PMI, which was offset by a greater decline in the gauge for the manufacturing sector, bulls were unable to gain any ground on the market.

Following that, market investors will be looking forward to the publication of the flash PMI prints, Durable Goods Orders and the weekly initial jobless claims report, which will all be released in the United States on Friday.