Ella 
GBP/USD briefly tested a four-week high on Monday, breaking above 1.2840, before broad market flows pushed GBP/USD back to the week’s opening level above 1.2800. The week’s light UK data is still light, leaving traders caught between peaking hopes for rate cuts and an overly cautious Federal Reserve (FED), which insists on waiting for further signs that US inflation will decline towards the Fed’s 2% annual inflation target before cutting rates.
FX Today: Focus on Powell
Fed Chairman Jerome Powell will present the Fed’s latest semi-annual monetary policy report to the US Senate Banking Committee this week, which will be his first of two testimonies. Fed Chairman Powell will then testify before the House Financial Services Committee on Wednesday.
Key US inflation data will be released later this week, with US Consumer Price Index (CPI) inflation on Thursday and Producer Price Index (PPI) wholesale inflation on Friday. CPI and PPI inflation data are expected to remain stable or slightly higher, and traders hoping for further declines in inflation data to help the Fed cut interest rates sooner rather than later this week may be disappointed.
UK data also remains limited this week, with various speeches from Bank of England (BOE) policymakers on Wednesday and the release of survey results of industrial and manufacturing activity on Thursday. UK industrial and manufacturing production is expected to rebound in May after falling slightly in the previous month.
