GBP/USD holds weaker near session lows, around 1.2765-60 region post-UK PMI

• GBP/USD comes under some selling pressure on dovish BoE stance.
• The UK final Manufacturing PMI arrives at 51.7 vs. 51.9 expected.
• Fed rate cut speculations weighed on the USD and helped limit losses.

The GBP/USD pair held on to its mildly weaker tone near session lows, around the 1.2760 region, and had a rather muted reaction to the UK macro data.

The pair failed to capitalize on its early uptick to mid-1.2800s, rather met with some fresh supply during the early European session on Monday after the Bank of England (BoE) showed readiness to take all needed steps to protect stability.

GBP bulls remained on the back-foot

This comes on the back of persistent uncertainty about the future UK-EU trade relationship and fears of a no-deal Brexit, which eventually turned out to be one of the key factors that exerted some fresh pressure on the British pound.

Meanwhile, a modest downward revision of the final UK Manufacturing PMI, coming in at 51.7 for February as compared to 51.9 estimated earlier, failed to impress bulls or did little to provide any meaningful impetus to the major.

However, the prevailing selling bias surrounding the US dollar, amid firming market expectations that the Fed will cut interest rates at its upcoming meeting on March 18, extended some support and helped limit deeper losses, at least for now.

Market participants now look forward to the release of the US ISM Manufacturing PMI for some short-term trading opportunities. The key focus, however, will be on the first formal meeting between the UK chief negotiator, David Frost, and his EU counterpart, Michel Barnier.

Technical levels to watch