Ella 
In early Asian trading on Thursday, GBP/USD continued to rise to around 1.2720. A better-than-expected UK consumer price index reduced bets on a rate cut by the Bank of England (BOE) in June, pushing GBP/USD higher. Later on Thursday, the UK and US are to release preliminary readings of their purchasing managers’ indexes.
Minutes of the Federal Reserve’s latest monetary policy meeting released on Wednesday showed that officials expressed more concerns about inflation, which is more stubbornly higher than expected starting in 2024, which makes the Fed lack the confidence to advance interest rate cuts. Federal Reserve Chairman Jerome Powell stressed last week that as inflation remains high, the Fed will “need to be patient and let restrictive policies work.” Investors see a near 60% chance of the Fed cutting interest rates for the first time in September, according to the CME FedWatch tool.
On the other hand, British inflation fell less than expected in April, prompting investors to scale back their bets on a rate cut by the Bank of England next month. The UK consumer price index (CPI) rose at an annual rate of 2.3% in April, compared with 3.2% in March. The Office for National Statistics reported on Wednesday that the figure was the lowest since July 2021. A rise in the UK consumer price index boosted the pound sterling (GBP), giving a “boost” to the GBP/USD currency pair. Markets have reduced the likelihood of a Bank of England rate cut in June to 18% from 50% on Tuesday.
