The British pound is showing limited movement today, with GBP/USD trading at 1.2681, up 0.25% in early North American trading. With no UK economic events, all eyes are on Federal Reserve Chair Jerome Powell’s speech at the ECB forum in Sintra, Portugal.
UK Economic Outlook: PMI Signals Weak Growth
The latest UK PMI data paints a mixed picture of the economy:
- Manufacturing PMI – 50.9 in June, indicating stagnation (below market estimate of 51.4).
- Services PMI – Slowing but still in expansion, expected at 51.2 for June.
- Construction PMI – Strongest sector, rising to 54.7 in May, highest since May 2022.
With business confidence weak and the UK election on July 4, uncertainty looms over the British economy.
Powell’s Speech: A Game Changer for GBP/USD?
Markets will closely watch Powell’s speech at the ECB forum for any signals on US interest rate policy. According to CME’s FedWatch Tool, there is a 60% probability of a September rate cut. If Powell hints at easing, we could see volatility in GBP/USD.
GBP/USD Technical Analysis
- Resistance: 1.2661 (tested), next at 1.2690
- Support: 1.2622, further down at 1.2593
A hawkish Powell could strengthen the USD, pushing GBP/USD below support levels. A dovish tone might see the pound gain traction above resistance.
What’s next? Keep an eye on Powell’s remarks and US job data, which could drive GBP/USD movement.
