GBPUSD came under further pressure following the release of June UK CPI which has shown yearly rising by only 2.4% as the same as May and April which is the weakest scale of rising since March 2017, while the consensus was referring to rising by 2.6%.
The figure lowered the odd of watching close by interest rate hiking in UK to drive the cable to be trading currently near 1.30 level, after breaking its formed bottom on last Oct. 17 at 1.3026.
After These odds rose significantly on the back of The MPC decision to leave the interest rate unchanged at 0.5% on last Jun. 21 by lower majority
As The MPC member and BOE chief economist Andy Haldane has joined both of Saunders and McCafferty in preferring raising the interest rate by 0.25%.
The MPC language in its economic assessment was also much more hawkish than was predicted referring clearly to economic evolving expecting the inflation in UK to pick up in the short term by slightly more than expected.
But that is not looking what's running and there could be change of this language next meeting MPC on Aug. 2.
The British pound has been hit yesterday by BOE's chief Mark Carney warning about reaching no Brexit deal which can dampen the economic activity in UK. Mark Carney was supposed to calm down the markets and lower the concerns about the banking system during his testifying before the treasure committee of the house of common.
The cable selling started yesterday on the back of rumors about the Labor party intention to support the amendment which has been represented by rebel Tory MPs to keep Britain in the customs union, if there no trade deal to be reached by the beginning of 2019.
However UK Prime Minister May could barely win a vote in the House of Commons on her Trade Bill amendments by 307 to 301 votes avoiding further political instability in UK.
While the falling of her cabinet could opened the way for her former foreign secretary Boris Johnson to take the lead.
Boris Johnson has triggered the most recent turmoil by his resignation following the resign of Brexit Minister David Davis on rising discrepancies over the Brexit talks.
Boris Johnson who is the favored one to Trump in UK was not only the foreign secretary, he was also the one who gathered considerable momentum to the Brexit when he was the Mayor of London defying The Former British PM David Cameron.
On the other side, The greenback could add more gains today versus the major currencies and also versus the gold which is trading now close to $1220 per ounce following breaking of its formed supporting level on last Dec. 12 at $1236.
After yesterday Jerome Powel's assurance on the importance of keeping the moving gradually on in the path of tightening saying "the gradual tightening would continue for now”
The Fed's chief looked confident of the US economic expansion ahead in the coming quarters and the rising of the inflation pressure, with continued improving of the US labor market, taking the attention away from the Trade tension fear.
Kind Regards
Global Market Strategist of FX-Recommends
Walid Salah El Din