The British pound (GBP) is trading lower near 1.3480 against the US Dollar (USD) during European trading hours on Wednesday (6/11). The GBP/USD pair weakened as the US Dollar traded broadly steady ahead of the US Consumer Price Index (CPI) data for May, due to be released at 12:30 GMT.

The US Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, edged up near 99.15.

Investors will be watching US inflation data as it will influence market expectations on the Federal Reserve's (Fed) monetary policy outlook. As measured by the CPI, headline inflation is expected to rise to 2.5% annually from 2.3% in April. In the same period, core CPI – which excludes volatile food and energy prices – is expected to grow by 2.9%, faster than the previous reading of 2.8%. In the month, both headline and core CPI are expected to grow by 0.2% and 0.3%, respectively.

Signs of rising price pressures will allow Federal Reserve (Fed) officials to commit to keeping interest rates steady until they gain clarity on the outcome of US President Donald Trump's tariff policy after he returns to the White House.

Even if the inflation data is softer than expected, Fed policymakers are unlikely to support an early rate cut, as they have cited concerns about volatile consumer inflation expectations under Donald Trump.

On the global front, trade tensions between the US and China have eased somewhat as the White House has signaled a positive outcome from a two-day meeting between the two countries' trade representatives held in London. US Commerce Secretary Howard Lutnick expressed confidence that both countries would lift export restrictions. (alg)

Source: FXstreet