The British pound is experiencing minimal movement on Tuesday, with GBP/USD trading at 1.2681 early in the North American session, showing a modest increase of 0.25% for the day.
Today, there are no significant events in the UK, while the US is set to release Jolts Job Openings data, and Federal Reserve Chair Powell will be speaking at the ECB forum in Sintra, Portugal.
Recent Purchasing Managers’ Indices (PMIs) for the UK paint a dismal picture of the economy. The manufacturing sector has just started to recover from a nearly two-year decline, with the Manufacturing PMI for June indicating stagnation at 50.9, below expectations. The services sector, which has been a key driver of the UK economy, is also showing signs of slowing growth, with the Services PMI expected to ease to 51.2 for June.
On a positive note, the construction sector has been surprising on the upside, with three consecutive months of acceleration. The Construction PMI for May came in above expectations at 54.7, the highest level since 2022. The June report is expected to show a slight easing to 53.6.
Investors will be closely watching Federal Reserve Chair Powell’s remarks at the ECB forum for any clues on the Fed’s rate path. Expectations of a September rate cut have remained steady at around 60% over the past week, according to CME’s FedWatch. Any indication of a rate cut could impact GBP/USD.
In terms of technical analysis, GBP/USD is currently testing resistance at 1.2661, with further resistance at 1.2690. Support levels are at 1.2622 and 1.2593.
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