GBP/USD Strengthens Above 1.3700, Market Awaits US PCE Inflation Data
GBP/USD Strengthens Above 1.3700, Market Awaits US PCE Inflation Data | GBP/USD Menguat di Atas 1,3700, Pasar Tunggu Data Inflasi PCE AS
The GBP/USD currency pair held strong at 1.3735 on Friday morning (6/28), driven by the weakening US Dollar (USD). This weakening occurred after US President Donald Trump hinted that he would announce the new Federal Reserve (The Fed) Chairman earlier, which sparked market concerns over the independence of the US central bank and the potential for a faster-than-expected interest rate cut.
Trump said that he has three to four candidates to replace Jerome Powell, but has not revealed the names of the finalists. This uncertainty has made investors worried that the Fed's policy could change direction and become looser (dovish), which ultimately depresses the value of the Dollar. In addition, the first-quarter US GDP data released Thursday showed an economic contraction of 0.5%, worse than market predictions, further weakening the USD.
Meanwhile, market attention is now focused on the release of the US Personal Consumption Expenditure (PCE) Price Index data for May which is scheduled to be released Friday night. The data is important because it is the Fed’s most closely watched measure of inflation and could influence the direction of future interest rate policy.
However, the potential for further gains for the pound (GBP) may be limited. Bank of England (BoE) Governor Andrew Bailey has previously said the UK labor market is starting to weaken and further interest rate cuts are likely. At its June meeting, the BoE kept interest rates unchanged at 4.25%, but three of the nine members of the committee voted to cut rates, signaling an increasingly dovish outlook from the Bank of England.
Source: (ayu-newsmaker)
