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GBP/USD Trades Close To 1.2700 Amidst Conflicting UK Employment News, With Attention On Fed Minutes And US NFP
The GBP/USD exchange rate is stagnant after gaining the most in two weeks and three consecutive quarters. In the midst of a looming health crisis stemming from a planned July strike by healthcare employees, the UK's health secretary intends to hold new discussions with physicians. Fears of a recession in the British economy grow as a result of unimpressive UK data, but BoE conservatives defend Cable buyers. The British Pound has fewer domestic data points, while the US economic calendar can entertain traders.
GBP/USD flirts with the 1.2700 round number as bulls search for additional clues to defend the previous day's advance amid a lethargic start to the crucial week. Nonetheless, the Cable pair's recent inaction may also be attributable to the contradictory news reports about the UK's employment and growth conditions, as well as the absence of a distinct market reaction to the news of the US-China talks.
The UK Times published an article indicating that British Health Secretary Steve Barclay is willing to give physicians a larger pay rise, calling for an end to consultant strikes so that negotiations can resume. "Barclay's admission came as the head of the NHS (National Health Services) warned that disruptions to routine healthcare would become "more significant" this month," the news reported. It should be noted that the employment report for the United Kingdom appeared divided and indicated an easing of the labour shortage.
A senior US Treasury official and the China Treasury Department have both recently verified that US Treasury Secretary Janet Yellen will visit China from July 6 to 9. Reuters reports that US Treasury Secretary Yellen will express concern over human rights abuses against the Uyghur Muslim minority, China's recent decision to ban sales of Micron Technology memory chips, and China's actions against foreign due diligence and consulting firms.
It should be noted that Friday's milder US inflation indicators triggered a risk-on market sentiment and supported the GBP/USD pair's ascent. In spite of this, the Cable pair has declined for two consecutive weeks due to concerns of a UK recession. According to the most recent data, the UK's GDP for the first quarter of 2023 (Q1) matches the 0.1% QoQ and 0.2% YoY forecasts.
On Friday, the preferred inflation barometer of the Federal Reserve (Fed), namely the US Personal Consumption Expenditures (PCE) Price Index, disappointed hawkish expectations from the US central bank with the smallest yearly increase in six months. The absence of any significant hawkish comments from US central bank officials, following a flurry of Fed statements earlier in the week, aided the GBP/USD supporters.
In this environment, S&P500 Futures continue to climb by tracking Wall Street's positive performance, whereas US Treasury bond yields continue to rise.
The final readings of the UK's S&P Global/CIPS Manufacturing PMI for June will precede the US ISM Manufacturing PMI for the same month in determining intraday GBP/USD price movements. However, this week's Federal Open Market Committee (FOMC) Monetary policy meeting Minutes and the US employment report will garner the most attention.
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