GBP/USD snaps losing streak as fresh Greenback weakness reverses market flows

• GBP/USD caught a volatile step higher on Wednesday, snapping an eight-day losing streak.

• Renewed political angst over Trump targeting Fed Chair Powell has waylaid the Greenback.

• US PPI inflation eased in June, cooling off inflation fears.

GBP/USD saw renewed gains on Wednesday, snapping an eight-session losing streak as Cable bidders pump the brakes on an extended backslide. The Greenback took a fresh hit from souring broad-market sentiment after President Donald Trump ramped up his attacks on Federal Reserve (Fed) Chair Jerome Powell, and investors may be getting worried about the Fed’s political independence.

UK Consumer Price Index (CPI) inflation in June accelerated across the board on Wednesday. Inflation risks make it difficult for the Bank of England (BoE) to make any further rate cuts, bolstering the Pound Sterling further.

President Trump pivoted to a half-hearted statement that he’s “not planning on doing anything” about Fed Chair Powell at the moment, however brandishing a termination letter written specifically for the Fed head in front of Congress on Wednesday sent a clear signal that Trump is looking for an avenue to terminate Powell’s position as head of the Fed.

Coming up on Thursday, Cable traders will be facing down a fresh batch of UK labour data, followed by US Retail Sales figures. Key US consumer sentiment survey indicators on Friday will round out the trading week.

GBP/USD price forecast

Wednesday’s meager rebound has cut off a one-sided near-term decline after Cable tumbled away from multi-year highs in early July. GBP/USD looks set to confirm a technical bounce from the 1.3400 handle, but only if bidding pressure is able to maintain momentum.

GBP/USD daily chart