Ella 
GBP/USD continued to move sideways in Asian trading on Tuesday and remains confined to the range it has been in for the past two weeks. GBP/USD is currently trading around the 1.2655-1.2645 confluence level (including 50-day and 100-day simple moving averages (SMAs)).
Meanwhile, the Bank of England (BoE)’s dovish stance in June, which has increased bets on a rate cut at the August monetary policy meeting, continues to weigh on the British pound (GBP). On the other hand, the US dollar continued to rise after rebounding from multi-day lows overnight, which seems to be a further resistance to GBP/USD. On Monday, the 10-year US Treasury yield surged to its highest level in a month due to market concerns that the Trump administration’s aggressive tariffs could increase inflation and trigger high interest rates.
In addition, weak US stock futures also provided some support for the safe-haven US dollar. That is, more and more investors believe that the Federal Reserve (Fed) will start a rate cut cycle in September, which has curbed further upward movement in US bond yields. This expectation was reaffirmed by the US ISM Manufacturing Purchasing Managers Index released on Monday, which showed that the US manufacturing industry shrank for the third consecutive month in June. Coupled with signs that US inflation is falling, the Federal Reserve should start to reduce borrowing costs.
Traders may also prefer to wait for more clues about the Fed’s rate cut path before preparing for the next direction of GBP/USD. Therefore, the speech of Fed Chairman Jerome Powell later on Tuesday and the minutes of the Fed meeting on Wednesday will remain the focus of the market. In addition to this, the US monthly employment data (commonly known as the “non-farm payroll report”), which will be released on Friday, will also have a key impact on the recent price trend of the US dollar.
