Ella 
GBP/USD fell modestly to around 1.2760 in Asian trading on Wednesday. The dollar and US yields recovered slightly as market expectations for a September rate cut by the US Federal Reserve (Fed) weakened, which put pressure on GBP/USD. The Fed’s Beige Book will be released later on Wednesday, and Fed Chairman John Williams will also speak.
The Conference Board reported on Tuesday that consumer confidence improved slightly in May. The consumer confidence index rose to 102.0 in May from 97.0 in April, above the expected value of 95.9. However, US consumers are still worried about inflation, and many households believe that interest rates will increase next year.
Meanwhile, more hawkish comments from Federal Reserve officials boosted the dollar across the board. Fed Governor Michelle Bowman said on Tuesday that she supports waiting to start a slower pace of quantitative tightening, or supporting a more moderate reduction in quantitative easing than announced earlier this month. Neel Kashkari, president of the Minneapolis Fed, said the central bank should wait for significant progress in inflation before cutting interest rates, and said he does not expect more than two rate cuts in 2024.
On the other hand, expectations that the Bank of England (BOE) will start cutting interest rates in June dragged down the British pound (GBP). The International Monetary Fund (IMF) raised its forecast for UK economic growth, but expects the Bank of England to cut interest rates two or three times. In the absence of major economic data released in the UK, the prospect of a general election may drive the pound. If the market continues to worry about the political outlook in the UK, it may weigh on the pound and pose resistance to GBP/USD.
