The GBP-USD exchange rate is closely monitored by traders due to the developments at the Bank of England (BoE) and the volatile US economic landscape. Clare Lombardelli, who will take on the role of deputy governor for monetary policy at the BoE on July 1, 2024, is currently appearing before lawmakers in parliament’s Treasury Committee. Prior to assuming her duties, Lombardelli brings a fresh perspective to her position, having served as the OECD’s Chief Economist.
In London, recent labor market data has caused mixed reactions among GBP-USD traders. Although job numbers have declined, wage growth remains strong. This situation may influence the BoE’s decisions and delay any aggressive rate cuts until August despite an increase in unemployment and consecutive negative payroll revisions.
In contrast, the US dollar is strengthening against GBP pressures as Treasury yields rise to a five-month high of 4.60%. The increase in Treasury yields is attributed to concerns about inflation and geopolitical tensions. Despite acknowledging a decrease in inflation, Treasury Secretary Janet Yellen emphasizes the need for additional measures to stabilize the economy.
The Federal Reserve has put off its plans for rate cuts due to persistent inflation, contributing to the dollar’s strength against GBP pressures. Additionally, recent data shows that the US industrial sector has demonstrated strength with a 0.4% increase in production and a rise in capacity utilization, indicating that the economy is holding steady.
A technical analysis reveals that there is a bleak outlook for investors interested in buying or selling GBP-USD pairs. The previous week marked one of the worst performances in nearly a year, and it looks like this trend will continue for another month unless there are significant negative developments for USD holders or positive developments for GBP holders.
