Important events today:

15.07 14:00 UTC: USD – Fed Chair Kevin Warsh will present the semi-annual report to the US Congress.

The pound enters the European session on a firmer footing after softer US inflation dampened expectations of an early Fed rate hike. The decline in US yields reduced the dollar’s advantage and supported the GBP-USD pair. At the same time, the movement remains restrained: the market is waiting for fresh confirmation that the slowdown in US price pressure was not a one-off event.

The UK’s domestic background provides the pound with a limited but noticeable foothold. The Governor of the Bank of England noted that the new escalation in the Middle East increases uncertainty, but has not yet significantly altered the British inflation forecast. This reduces the risk of a sharp revision of the regulator’s policy, although high oil prices and rising borrowing costs remain a vulnerability for the economy.

Political and fiscal uncertainty prevents relying on a one-sided strengthening of the British currency. Nevertheless, within the current session, the overall dollar factor looks stronger than the pound’s local risks: the soft US report has already changed the assessment of the Fed’s near-term actions. If the producer price data does not refute this signal, the base scenario allows for further growth of the GBP-USD pair.

Recommendations: BUY 1.3405, SL 1.3370, TP 1.3480.