British Pound Forecast – Politics and Data Dominate GBP/USD

[MongiIG]

Jul 25, 2022 | DailyFX
Nick Cawley, Strategist

GBP/USD - PRICES, CHARTS, AND ANALYSIS

• UK politics back in the spotlight.
• GBP/USD traders should be wary of heavyweight US data releases.

The two candidates looking to be the next UK Prime Minister, Liz Truss and Rishi Sunak, will take part in a series of head-to-head televised debates, starting tonight, that will go a long way to deciding who gets the keys to No.10 Downing Street. Current polling shows Foreign Secretary Truss leading the former Chancellor among Conservative voters and party members.

While UK politics may make headlines this week and affect Sterling, a range of heavyweight US data and events this week will likely be the driver of any moves in GBP/USD. The standout event is the FOMC meeting on Wednesday where the Fed is expected to hike interest rates by another 75 basis points. The latest market pricing shows a 76.3% probability of a 75 basis point hike and a 23.7% of a 100 basis point move. In addition, the first look at US Q2 GDP on Thursday – likely negative – and Core PCE on Friday will give traders a much better take on the state of the US economy.