GBP fluctuates ahead of BoE meeting; US factory activity rose to record high in June

GBPUSD fluctuates before BoE meeting which will be held later in the day. It once rose to $1,3967 but has declined since then, currently trading at 1.3955. UK economy continues to gather momentum, with 2.1% annualized inflation rate. Current inflation level is above central bank’s target, but economists expect no immediate change on the monetary policy because there has been some recent pickup in new COVID cases. Moreover, as the government gradually reopens its economy, changes on the monetary policy will likely exert too much impact.

US factory activity climbed a its record high in June, with flash reading landing at 62.6. In May, the figure was 62.1. However, the US current account deficit has also increased to a 14-year high in Q1. Current account deficits indicate that, the US has been importing more than it is exporting. The number rose by nearly 12% to $195.7 billion. But since USD is the world’s reserve currency, a wider deficit is likely not an issue.