July 13, 2022 01:03 AM ET
By: AnalysisWatch
The GBP/USD fell back to 1.1900 as the market was concerned ahead of key UK and US data.
Nevertheless, the cable pair broke a two-day downtrend and held above the two-year low marked the previous day before the London opening on Wednesday.
The mildly positive market sentiment supported the decline in the U.S. dollar and helped the GBP/USD consolidate losses around a multi-month low at the start of Asian trading. The reason for the slightly positive sentiment could be related to the optimistic statement from the White House (WH) and weaker US data.
In the Financial Times (FT), the pessimism about the UK is underlined by the lack of strategies. Three reports published Wednesday said, "The UK needs a coherent long-term economic strategy that supports robust growth in national economic output after years of ministerial inconsistency." The Resolution Foundation, Treasury Select Committee, and National Audit Office were cited in the update as key reports supporting that conclusion.
If Rishi Sunak is elected prime minister, he appears to be following in the footsteps of famed government leader Margret Thatcher in working toward an economic recovery: Tax cuts will follow in due course, but the Tory leadership contender told The Telegraph that fighting the "enemy," inflation, is key.
Among those bets, the U.S. dollar index (DXY) is hovering near a 20-year high, while S & P 500 futures and 10-year U.S. Treasury bond yields are breaking a two-day downtrend. In addition, Asia-Pacific equities also appear to be abandoning their previous bearish trend.
Following that, the U.S. Consumer Price Index (CPI) for June, which is expected to rise to 8.8% y/y from 8.6%, will be crucial for pair traders.
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