GBP/USD is facing challenges as the US Dollar strengthens due to cautious comments made by Fed Chair Powell. Powell mentioned that the first-quarter data did not support increased confidence in the inflation outlook. BoE policymaker Jonathan Haskel also emphasized the need to keep interest rates steady until there is more certainty about inflationary pressures easing.
The GBP/USD pair has been lackluster for the past two days, hovering around 1.2780 during the Asian trading session on Wednesday. The decline in the pair is attributed to the US Dollar gaining strength following Powell’s testimony before Congress. Powell highlighted the importance of more positive data to boost confidence in inflation and stated that the Fed will not consider cutting rates until inflation is on a sustainable path towards 2%.
Traders are anticipating more speeches from Powell and other Fed officials, as well as the release of the US Consumer Price Index data on Thursday. In the UK, Haskel’s recommendation to maintain interest rates reflects concerns about persistent price pressures in the job market. The Pound Sterling has been relatively stable against other major currencies as investors await key economic indicators such as the UK’s GDP and factory data due on Thursday.