Ella 
GBP/USD had a lackluster performance in London on Wednesday. The pair’s recovery from a more than five-week low of 1.2620 appears to have stalled near the 1.2700 round resistance level. Investors turned their focus to the US core personal consumption expenditures price index (PCE) data for May, which will be released on Friday.
Investors will be closely watching the core PCE inflation data, the inflation indicator favored by the Federal Reserve. The data will provide new clues on when and by how much interest rates will be cut this year. The underlying inflation data for May is estimated to have slowed to 2.6% from the previously reported 2.8%, and the monthly data growth rate slowed to 0.1% from 0.2% in April.
Currently, investors expect the Fed to start a rate-cutting cycle at its September meeting and extend it further in November or December.
Instead, Fed policymakers continue to advocate keeping interest rates at current levels for longer until they get evidence that inflation will return to the desired level of 2%. Fed officials want to see inflation fall for several months to gain confidence in cutting rates, providing hawkish guidance.
On Tuesday, Fed Governor Michelle Bowman supported maintaining the current policy framework for some time to curb price pressures. If deflation stalls or reverses, she still wants to raise rates further. When asked about the timing of a rate cut, Bowman said she didn’t think there would be a rate cut this year.
