The GBP/USD pair is advancing above 1.1800, resuming its recovery from two-year lows. The US Dollar Index (DXY) began Wednesday on a firmer footing before retreating towards 108.50, down 0.15% at the latest. The equities pared recent losses amid a lack of too-strong US data.
Also exerting downside pressure on the greenback’s gauge versus the six major currencies was the indecision among the latest Fedspeak and market chatters that Fed Chair Powell may repeat his economic fears and may refrain from too hawkish comments at the Jackson Hole Symposium.
Looking forward, the second version of the US Q2 GDP will join the US Personal Consumption Expenditure (PCE) for the stated period to decorate the calendar. However, major attention will be given to Jackson Hole for fresh impulse.
It’s worth noting that Morgan Stanley recently mentioned in its analytics that they continue to see the weak growth outlook weighing on GBP. However, we do not see a material leg lower in GBP from here given how low growth expectations already are and how bearish sentiment is already on GBP.