Important events today:

02.07 13:15 UTC: USD – ADP Employment Change.

On Wednesday during the Asian trading session, the GBP/USD pair is trading flat around 1.3745. However, dovish remarks from Fed Chair Jerome Powell and rising budget concerns could put pressure on the dollar in the near term. Investors are awaiting the ADP employment report for June in the U.S., which will be published later on Wednesday, hoping for new momentum.

Powell stated on Tuesday that the U.S. central bank will approach further rate cuts patiently, but he did not rule out a rate cut at the July meeting, noting that the decision will depend on incoming data. According to the CME FedWatch tool, short-term interest rate futures now price in nearly a 1-in-4 chance of a rate cut in July, compared to less than 1-in-5 earlier.

Investors are concerned about President Donald Trump’s massive tax and spending bill, which could increase the national debt by $3.3 trillion. The bill will return to the House of Representatives for final approval. Fiscal concerns could dampen optimism and contribute to a weaker U.S. dollar.

As for the British pound, Bank of England (BoE) Governor Andrew Bailey stated last week that there are currently signs of a weakening labor market in the UK, and emphasized that interest rates are likely to continue declining. The UK central bank is expected to cut interest rates three times by the end of 2025, bringing them to 3.5% to counter sluggish economic growth and a weakening labor market. Cuts are expected in August, September, and November 2025, with possible quarterly reductions.

Recommendations: SELL 1.3745, SL 1.3790, TP 1.3675.