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GBP/USD attempts recovery toward 1.3950 as USD soften ahead of PCE data

  • GBP/USD prints modest gains in the Asian session.
  • Mixed economic data, Fed’s view on inflation weighs on the US dollar.
  • GBP rebounded from the blow of BOE’s dovish stance and asset purchase program.

GBP/USD edges higher on Friday morning in the Asian session. After falling below the 1.3900 mark a day before, following the much anticipated Bank of England (BOE) monetary policy decision, the pair made a comeback today.

At the time of writing, GBP/USD is trading at 1.3931, up 0.06% for the day.

The move is primarily sponsored by the sluggish movement in the US dollar. The greenback slips below the 91.80 mark and trades with 0.04% losses. 

Investors assessed the Fed’s stance on inflation as the central bank’s top priority is economic growth and improved labor market conditions. US Fed Chair Jerone Powell once again downplayed the risk of inflation. 

The mixed US economic data also added to the downbeat sentiment surrounding the US dollar. The Weekly Initial Jobless Claims fell to 411K, remaining well above 200K levels before the coronavirus pandemic.  The US Goods Trade Deficit widened to $88.1 billion in May, from $85.7 billion in April. The US Gross Domestic Growth (GDP) remained unchanged at 6.4%.

Meanwhile, US President Joe Biden said he reached a $579 billion infrastructure deal with a bipartisan group of senators.

On the other hand, the sterling keeps the lower ground after the Bank of England (BOE) as widely expected, left its interest rates unchanged at a record low of 0.1% in its June meeting and a bond-buying program.

The UK Gfk Consumer Confidence stood at -9 in June, unchanged from the previous month. The data provided some boost to the cable, although it failed to trigger much buying interest in the currency.

As for now, investors are waiting for the UK CBI Distributive Trade for June and the US Personal Consumption Expenditure (PCE) Index to gauge the market sentiment

GBP/USD additional levels

 

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