British Pound surrenders early gains as US Dollar regains ground
The British Pound (GBP) gives back its early gains and turns almost flat around 1.3410 against the US Dollar (USD) during the European trading session on Friday. The GBP/USD pair falls back as the US Dollar regains ground amid fears that the restart of the war between the United States (US) and Iran would last long.
In the European trade, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, recovers to near 100.85, but is still 0.1% down from Thursday’s closing price. Earlier in the day, the DXY revisited the three-week low of 100.60.
Late Thursday, the Iranian state media confirmed US forces striking several more locations in coastal Iran. In the last two trading days, several media outlets have reported that the US Central Command has attacked Iran’s power and water infrastructure.
However, a US official has confirmed that technical talks with Iran are still going on despite President Donald Trump declaring an end to the memorandum of understanding (MOU) with Iran.
On the domestic front, investors shift focus to the US Consumer Price Index (CPI) data for June, which will be released on Tuesday. The data is expected to show that the core CPI – which excludes volatile items such as food and oil – grew at a steady pace of 2.9% Year-on-Year (YoY).
The impact of the US inflation data will be significant on the Federal Reserve’s (Fed) monetary policy outlook, as the Federal Open Market Committee (FOMC) minutes of the June meeting showed on Wednesday that high inflation is still a “dominant risk” for policymakers.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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