Cable loses ground against the dollar and turns negative against the euro.
The dollar maintains its losses as a result of Powell’s statements.
The GBP/USD reached a high of 1.3891 a few hours ago and then fell back, finding support near 1.3850. It’s still a long way from the daily high, trading aimlessly between 1.3900 and 1.3800, as it has done for the past week.
Earlier in the day, the pound climbed across the board, boosted by UK inflation statistics. In June, the CPI increased to 2.5 percent, which was more than the projected 2.2 percent. During American hours, the pound lost ground and began to fall against the euro.
While the GBP/USD is currently trading towards the middle of its daily range around 1.3860, the EUR/USD is trading at new highs above 1.1830.
In a meeting with lawmakers, Chair Powell stated that inflation will likely remain high in the coming months before reducing. He believes the labor market has a long way to go, implying that QE will not be tapered in the near future. His remarks damaged the US currency, reversing recent gains following higher-than-expected US inflation figures.
The Federal Reserve will release the Beige Book, a report on the status of the economy, later on Wednesday. In the United Kingdom, employment data is due on Thursday. Jobless claims, the Philadelphia Fed, and industrial production figures are all due in the United States. In addition, Fed Chair Powell will testify on monetary policy once more./n
