Ella 
GBP/USD fluctuated above 1.2800 in early London trading on Tuesday. Investors are awaiting the semi-annual congressional testimony of Federal Reserve (FED) Chairman Jerome Powell, which is scheduled for 14:00 GMT (22:00 Beijing time).
Fed Powell is expected to acknowledge some progress on inflation and continue to rely on data to decide whether to cut interest rates. Powell is likely to continue to avoid providing any timetable for rate cuts and emphasize the need to maintain higher interest rates until policymakers see inflation rates fall for several consecutive months. However, he may also show some concern about the slowdown in the strength of the US labor market.
Cable’s overall appeal is quite firm as market speculation deepens that the Fed will cut interest rates from the September meeting. According to the CME FedWatch tool, 30-day federal funds futures pricing data shows that the probability of a rate cut in September has increased to 77% from 65.6% a week ago. The US June non-farm payrolls report (NFP) showed that the labor market has lost momentum, triggering expectations of an early rate cut by the Fed.
This week, the main trigger for the dollar will be the U.S. Consumer Price Index (CPI) data for June, due on Thursday. The U.S. CPI report is expected to show that core inflation, which excludes volatile food and energy items, rose steadily by 0.2% month-over-month and 3.4% year-over-year. Signs of a stalling or reversal of deflationary progress would dampen market expectations for a September rate cut by the Federal Reserve, while weak data would boost market expectations.
