GBP/USD struggles around 1.1520 ahead of BOE Bailey and Fed Powell’s speech

The GBP/USD pair is facing barriers in crossing the immediate hurdle of 1.1520 in the early Tokyo session. The asset is displaying a volatility contraction phase after correcting from the round-level resistance of 1.1600 on Tuesday. The cable witnessed a steep fall after the market participants underpinned the greenback on robust US ISM Services PMI data.

Upbeat US ISM Services PMI strengthened he DXY

The Non-Manufacturing ISM data landed at 56.9, higher than the estimates and the prior release of 55.1 and 56.7 respectively. A surprising improvement in the Services PMI strengthened the mighty US dollar index (DXY) and printed a fresh two0decade high at 110.55. The DXY is establishing itself above the psychological resistance of 110.00 and is gearing up for a fresh rally ahead.

Going forward, the DXY will dance to the tunes of the speech from Federal Reserve (Fed) Jerome Powell scheduled on Thursday. Fed Powell will provide cues about the likely monetary policy action in September monetary policy meeting.

Truss’s relief packages to scale down the impact of higher inflation

On the UK front, after securing the position of next UK Prime Minister, Liz Truss is continuously announcing relief packages for the households against soaring inflation. To safeguard households from soaring energy bills, Liz Truss announced a fund of 130 billion pounds for freezing bills. Under this, the new cabinet will set a fixed unit price for energy suppliers to sell gas & electricity to households.

And, now Truss will cut taxes for households, which will remain supportive to combat higher payouts. Apart from that, the Cabinet will focus on making more investments and scaling up the employment generation process. In addition to that, the speech from Bank of England (BOE) Governor Andrew Bailey will remain in focus. BOE’s Bailey will dictate the likely monetary policy action at the next policy meeting, scheduled for September 15.