GBP/USD struggles amid strengthening of the US dollar | 10 July 2024

Event to pay attention to today:

17:00 GMT+3. USD - Federal Reserve Chairman Jerome Powell Speaks

GBPUSD:

The GBP/USD pair has weakened for the second consecutive day, trading around the 1.2780 mark during the Asian session on Wednesday. The decline in the GBP/USD pair can be attributed to the strengthening of the US Dollar (USD), which gained strength after Federal Reserve Chairman Jerome Powell's speech before the US Congress on Tuesday. Powell acknowledged the improvement in inflation data, but reiterated the Fed's cautious stance.

In his speech before the US Congress on Tuesday, Fed Chairman Jerome Powell said that better data would strengthen the Fed's confidence in inflation. Powell also emphasised that a rate cut is not appropriate until the Fed has more confidence that inflation is moving steadily toward 2%. He noted that first-quarter data have not contributed to greater confidence that inflation is on the path needed for the Fed to cut rates.

Traders will be monitoring the second semi-annual speech by Fed Chairman Jerome Powell, as well as speeches by Fed officials Michelle Bowman and Austan Goolsbee on Wednesday. Additionally, the US Consumer Price Index (CPI) data, scheduled for release on Thursday, will be a key focus.

In the UK, Bank of England policymaker Jonathan Haskell has recommended maintaining current interest rates due to persistent price pressures in the labour market. Haskell emphasised: "My preference is to keep rates unchanged until we see more reassurance that underlying inflationary pressures have indeed abated," Reuters reports.

The Pound Sterling (GBP) is showing subdued movement against major currencies as attention shifts to upcoming economic data. In particular, investors are awaiting the release of the UK's monthly Gross Domestic Product (GDP) data and May factory data, which will be released on Thursday.

Trading recommendation: We follow the level of 1.2800, on the rebound we take Buy positions. If we consolidate below, we take Sell positions.

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