Ella 
GBP/USD rose modestly around 1.2700 in early trade on Tuesday, with market participants watching heavyweight statistics from the UK and the US. That said, GBP/USD’s latest rebound from its lowest level in 1.5 months amid a dollar pullback failed to extend the rally amid cautious sentiment ahead of key data releases and lingering concerns over key risk catalysts trend.
That said, the U.S. dollar index (DXY) retreated from its highest level in five weeks, and was trading near 103.05 for the first time in four days at press time. That said, the New York Fed’s July tally of one-year inflation expectations fell to 3.5%, a drop of three percentage points to the lowest level since April 2021. However, the New York Fed survey also indicated confidence in positive labor market conditions and a transition to the economy.
Beyond that, comments from US Treasury Secretary Janet Yellen appear to be positive for market sentiment, favoring GBP/USD bulls. Nevertheless, U.S. Treasury Secretary Yellen still mentioned the risks and spillover effects of China’s economic slowdown, the Russian-Ukrainian war and climate change-related disasters on global economic development.
It is worth noting that a series of recent Chinese data and official speeches from the National Bureau of Statistics of China have pointed to the poor economic outlook of the world’s second largest economy and stimulated risk sentiment.
In the United Kingdom, according to Reuters, the Chartered Institute of Personnel and Development (CIPD) released the details of its latest survey, and pointed out that human resources executives expect a median base salary increase of 5%, which is the same as the previous two quarters. The highest value since the survey began in 2012. The news added to the Bank of England’s hawkish bias following last week’s upbeat UK growth data.
Against this backdrop, S&P 500 futures rose modestly, while U.S. 10-year Treasury yields traded near the highest level since November 2022 hit the previous day.
The UK unemployment rate likely remained unchanged at 4.0% in the three months to June, while average earnings in the three months to June are expected to improve.
