The GBP/USD pair declined even after the Federal Reserve chair defended the bank’s policies so far. In a statement to Congress, Jerome Powell said that the ongoing inflation was higher and steadier than its estimates. He also repeatedly noted that inflation will soon fall as the economy moves from the transition phase. As a result, he said that the bank will not hesitate to tighten conditions to keep managing the prices. Powell’s statement came a day after the Bureau of Labor Statistics showed that the headline CPI rose by 5.4% in June, the highest level since 2008. Similarly, the core CPI rose by 4.2%, which was the highest level in 30 years.
The GBP/USD will react to the latest UK employment numbers. The data are expected to show that the unemployment rate dropped from 4.7% in April to 4.5% in May as more businesses continued to reopen. Economists also expect the average earnings with a bonus to rise from 5.6% to 7.1% as companies continued to compete for workers. Without bonuses, earnings are expected to rise to 6.6%. The pair is also in a tight range as investors wait for the upcoming full reopening of the UK economy. While this will likely boost the economy, there are concerns that it will have negative effects as infections rise. The pair is also in a tight range as investors wait for the upcoming full reopening of the UK economy. While this will likely boost the economy, there are concerns that it will have negative effects as infections rise. The GBP/USD pair will also react to the latest US initial jobless claims data and the New York and Empire Fed manufacturing numbers.
GBP/USD Short (Sell)
Enter at: 1.3801