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  • GBP/USD remains on track to close the day unchanged.
  • US Dollar Index continues to fluctuate below 90.00.
  • BoE’s Bailey says current trends don’t support the view for additional support.

The GBP/USD pair dropped toward 1.4100 during the European trading hours but didn’t have a tough time erasing its losses. After turning flat around 1.4150 in the second half of the day, the pair seems to have gone into a consolidation phase and now looks to close the day virtually unchanged.

BoE’s Bailey sees current policy settings as appropriate

Comments from Bank of England (BoE) officials failed to trigger a meaningful market reaction on Monday. While testifying before the Treasury Select Committee, BoE Governor Andrew Bailey said growth and inflation trend don’t support the idea that additional monetary support is needed at the moment.  “I am pretty content we are on appropriate policy setting,” Bailey added.  

BoE  Deputy Governor Jon Cunliffe said he emphasises the guidance that they will not tighten policy until there is clear evidence progress is being made in eliminating spare capacity.

On the other hand, the strong performance of Wall Street’s main indexes force the greenback to remain on the back foot and doesn’t allow GBP/USD to push lower. At the moment, the S&P 500 is up 1.1% on the day and the US Dollar Index is losing 0.15% at 89.90.

There won’t be any high-tier macroeconomic data releases from the UK on Tuesday. Later in the day, the Conference Board’s Consumer Confidence and New Home Sales data from the UK will be looked upon for fresh impetus.

Technical levels to watch for