Sterling was little changed on Friday after bouncing off early-U.S.
lows by 1.3892 nL2N2O7115 with the help of unexpectedly soft U.S. core monthly PCE inflation nAPN07024G but lagging other major currencies against the dollar after BoE hesitated to follow the Fed into policy normalization debate.
For now, GBP/USD is likely to remain rangebound, caught between April lows at 1.3670 and June 1's 2021 high at 1.4250 under the influence of central bank caution.
Today's mixed personal income nW1N2O7000 and consumption data were not strong enough to alter the less-hawkish tones of Fed Chair Jerome Powell's congressional testimony earlier this week nN9N2M1016, which took the sting out of the FOMC's more hawkish rates projections last week.
Sterling's underperformance comes after Thursday's considerably less hawkish BoE hold.
The BoE followed the dovish lead of Powell's rhetoric this week -- rather than the stance of the Fed as a whole last Wednesday -- keeping rates steady as expected but touting near-term inflation rises as transitory and deferring asset purchases reductions as the UK eyes a delayed reopening in July.
Though recent UK data has hinted at post-COVID economic recovery, headwinds in from rising Delta variant infections nL9N2LG02C and UK-EU post-Brexit trade issues leave the BoE in no rush to act.
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