GBP/USD modestly advances in the session, awaiting FED’s minutes

• Bottomed at 1.3718 for a new three-week low.
• Market’s focus has reverted towards covid cases and the effect on the supply chains.
• UK inflation figures, in line with the Bank of England target.
• RSI supports a move towards the downside, caution is warranted as the Fed will unveil the last meeting minutes.

Early in the America session, the GBP/USD modestly advances 0.09%, trades around 1.3756. Previously in the day, the cable declined and hit a three-week low of 1.3718 against the greenback.

Since Monday, the market’s attention has reverted towards Covid-19 cases. Despite an increase of infections in the US reaching higher and a report of over 1,000 deaths in a day, the US dollar has remained up for the first two days of the week. 

In regards to economic data, the UK’s released inflations numbers and came softer than expected. The CPI hit 2% versus 2.2% foreseen yearly, while the Core CPI read was 1.8% vs 2.0% expected.  This takes some pressure off to the BoE. It seems that inflationary pressures are “transitory” as the report came in line with the Bank’s inflation target of 2%.

Concerning the US, the Housing figures were released. Housing Starts in the country diminished a 7% MoM in the last month, after an increase of 3.5% in June.

Nevertheless, the GBP/USD remains with no clear direction. With the Federal Reserve unveiling the last meeting’s minutes, investors are failing to commit, due later at 18:00 GMT.

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