Investors await US July CPI and UK Q2 GDP figures, with inflation data likely to sway Fed rate expectations.
The GBP/USD pair remains range-bound at approximately 1.3500 in European trading, as markets await key economic releases. US July Consumer Price Index (CPI) data, due later today, is expected to influence Federal Reserve interest rate decisions, following signals of heightened inflation concerns from Fed officials.
Analysts forecast US headline inflation at 0.2% month-on-month and 3.4% year-on-year, up from June’s -0.4% MoM and 3.5% YoY. Core inflation is projected at 0.2% MoM and 2.5% YoY, compared to prior readings of 0.0% MoM and 2.6% YoY. UK Q2 GDP data, scheduled for Thursday, is expected to show a slowdown to 0.4% growth from 0.6% in Q1, with annualized growth at 1.1%.
Technically, GBP/USD trades above its 20-day exponential moving average at 1.3437, with a broken downward resistance trend line now acting as support.