The GBP/USD pair gained traction around 1.3560 during the early European session on Tuesday, supported by a weaker US Dollar (USD). Traders will be eyeing Bank of England (BoE) Governor Bailey's speech, along with Federal Reserve (Fed) Chairman Jerome Powell's semi-annual testimony later on Tuesday.

Federal Reserve (Fed) Governor Michelle Bowman said on Monday that she would support a rate cut at the next policy meeting in July as long as inflationary pressures remain contained. Bowman's comments echoed those of Fed Governor Christopher Waller, who said on Friday that he believes the US central bank could consider a rate cut in July.

Dovish remarks from Fed officials could weigh on the greenback and act as a tailwind for the major currency pair in the near term. Traders are now pricing in a nearly 23% chance of a move at the July meeting, with a roughly 78% chance that the Fed will cut rates in September, according to the CME Grup's FedWatch tool.

On the other hand, uncertainty surrounding a ceasefire between Israel and Iran and renewed tensions in the Middle East could boost safe-haven inflows, supporting the pound sterling (GBP). The Israel Defense Forces (IDF) said early Tuesday that it had identified missiles fired from Iran into southern Israel, despite US President Donald Trump's declaration that a "complete and total" ceasefire between Israel and Iran would go into effect. (alg)

Source: FXstreet