GBP/USD is currently trading around 1.2740 in the early Asian session, facing mild losses as the US Dollar continues to strengthen. Investors are closely monitoring the upcoming US Consumer Price Index (CPI) data and the Federal Reserve rate decision. The recent robust US employment report has dampened expectations of a September interest rate cut by the Fed. However, a weaker-than-expected inflation report could influence Fed Chair Jerome Powell to stick to his projection of three interest rate cuts by the end of the year, leading to selling pressure on the Greenback.
The US CPI figure is expected to show a 3.4% year-on-year increase in May, while core CPI is estimated to rise 3.5% year-on-year in the same period. This data is crucial in determining the Fed’s next move and could impact the GBP/USD pair’s performance. Meanwhile, the Pound Sterling faced a setback during the North American session following disappointing UK employment data. As a result, GBP/USD dropped to 1.2711, down 0.14%. The pair remains neutral-biased on the daily chart, consolidating between 1.2687-1.2750 ahead of the FOMC’s decision, with buying pressure weakening and sellers gaining momentum.
The GBP/USD pair is struggling to gain ground below 1.2750 as the US Dollar maintains its strength amid market caution. Traders are waiting for the outcome of the US CPI data release, expected just before the Federal Reserve meeting. While the anticipation of a slower US interest rate cut has boosted the Dollar, any surprises in the inflation report could change the narrative. Traders will focus on Jerome Powell’s remarks following the CPI release and how they might affect the Fed’s future rate decisions. The outcome of these events will likely determine the direction of the GBP/USD pair in the short term.
In the midst of economic uncertainties and central bank decisions, the GBP/USD pair remains a key focus for traders looking to capitalize on potential market movements. The upcoming US CPI data and Fed rate decision will provide valuable insights into the future trajectory of the pair. With the Pound Sterling under pressure and the US Dollar on a winning streak, traders will closely monitor key levels such as 1.2687 and 1.2750 for potential breakout opportunities. In this volatile market environment, staying informed and reacting swiftly to changing dynamics will be essential for successful trading strategies in the GBP/USD pair.
