GBP/USD pushing higher amid broad weakness in the greenback

The pound pushed well into the 1.2550 region amid broad US dollar weakness on Thursday, which helped reclaim some of the territory lost during Wednesday’s sharp pullback. Extremely hot inflation and slowing economic data leaves the Pound vulnerable, and that is excluding mounting political pressure on Prime Minister Boris Johnson.

Sterling appears to be benefitting from lighter FX volumes, as UK markets are off for the rest of the week to celebrate the Queen’s platinum jubilee. Risk in general has taken these lighter volumes in stride, with US equity benchmarks higher and safe haven FX heading lower. Despite the pop, GBP/USD remains lower on the week, after 1.26 offered little to no support in yesterday’s session. The Pound may remain vulnerable as traders jostle ahead of a key period of G10 central bank meetings. Friday’s NFP report in the US could see Sterling sink back below the 1.25 threshold, should the report come in hot.

GBP/USD four hour chart

The UK economic calendar appears light ahead of the June 16th Bank of England policy meeting. Retail sales and PMI data highlight quiet period before a flurry of central bank meetings. With the Fed, BoE, and ECB all set to raise rates in such a short span of time, we may be in store for a period of heightened volatility across G10 FX.

Upside potential in the Pound remains limited below 1.2650, as price was unable to break through that area last week. A fall into the 1.2450 area may present an opportunity for bulls to reload, as this area has offered strong support for much of the last three weeks.

Upcoming UK economic calendar

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