Key events today:

18:00 UTC: USD – Publication of the Fed’s “Beige Book” economic review of the regions.

The Pound-Dollar pair trades with slight losses around 1.2760 during the Asian session on Wednesday. A moderate recovery of the US Dollar (USD) and US yields, amid reduced expectations for a Federal Reserve rate cut in September, influences the major pair. Later on Wednesday, the Fed’s “Beige Book” will be published, along with a speech by Fed Chair John Williams.

Consumer confidence improved slightly in May, the Conference Board reported on Tuesday. The index rose to 102.0 in May from 97.0 in April, exceeding the forecast of 95.9. However, American consumers remain concerned about inflation, and many households believe that interest rates will rise over the next year.

Meanwhile, US Fed officials have made more “hawkish” comments, which generally supported the strengthening of the dollar. Fed Chair Michelle Bowman said on Tuesday that she would support either waiting to begin slowing the pace of quantitative tightening or a more moderate rate reduction process than was announced earlier this month. Minneapolis Fed President Neel Kashkari stated that the central bank should wait for significant progress on inflation before lowering interest rates, adding that he expects no more than two rate cuts in 2024.

On the other hand, the expectation that the Bank of England (BoE) will start cutting interest rates in June is pulling the pound sterling (GBP) down. The International Monetary Fund (IMF) has raised its growth forecasts for the UK economy but expected two to three rate cuts from the Bank of England. In the absence of major economic data releases from the UK, speculation about the elections could stimulate movement in the pound sterling. Concerns about political uncertainty could harm the British pound and create headwinds for the GBP/USD pair.

Recommendations: Predominantly trade sell orders from the current price level.