Sterling is holding above 1.2000 on Thursday, having lost vigor following Tuesday's UK PMI beat-spurred rise to 1.2147 and then pushed lower after the Federal Reserve's higher-for-longer rate view was confirmed by hawkish minutes -- which lifted short-term U.S. rates and the dollar.
In the bigger-picture, GBP/USD remains rangebound between its Jan.
6 low at 1.1842 and Jan.
23 high at 1.2448 as traders are unwilling to commit one way or the other on the pound as Bank of England rate expectations vacillate between inflation-fighting advocated by the hawkish Catherine Mann and growth stimulation touted by doves Silvana Tenreyro and Swati Dhingra.
With the UK economy showing signs of growth, inflation tracking lower, and the British government resolved to settle lingering Brexit issues GBP/USD may be poised to move higher -- assuming the BoE keeps pace with the higher-for-longer Fed.
The pound has outperformed the yen and the euro over the last six months, rising 1.73% versus the dollar, helped by the BoE raising rates aggressively to reduce double-digit UK inflation.
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