- Cable reduces its gains against the dollar and becomes negative against the euro.
- The dollar retains losses, affected by Powell’s remarks.
GBP / USD peaked a few hours ago at 1.3891, then fell back, finding support around the 1.3850 area. It remains far from the daily high, still moving sideways between 1.3900 and 1.3800, as it has been during the current week.
Earlier, the pound rose across the board, supported by UK inflation data. In June, the CPI rose to 2.5%, above the expected 2.2%. In American hours, the pound lost its strength and turned negative against the euro.
As of this writing, as GBP / USD is trading near the middle of the daily range around 1.3860, EUR / USD is at new highs above 1.1830.
Powell speaks, the dollar goes down
President Powell, who is speaking with lawmakers, said inflation is likely to remain high for the next several months before moderating. He said the job market still has a long way to go, suggesting no slowdown in QE in the near term. His comments weakened the US dollar, reducing gains following recent higher-than-expected US inflation data.
Later Wednesday, the Fed will publish the Beige Book on the State of the Economy. Employment data is due Thursday in the UK. In the United States, jobless claims, the Philadelphia Fed and industrial production data are expected. Fed Chairman Powell will also be testifying again on monetary policy.