June US CPI data missed forecasts, cutting Fed rate-hike bets and weakening the USD, lifting GBP/USD to 1.3415.
The British Pound climbed against the US Dollar after US inflation data undershot expectations, easing pressure on the Federal Reserve to raise rates. GBP/USD reached 1.3415, a one-month peak, up 0.5% on the session.
US Consumer Price Index fell 0.4% month-over-month in June, below the forecast 0.1% decline, while annual inflation slowed to 3.5% from 4.2%. Core CPI was flat, missing the 0.2% increase estimate. The softer prints pushed the US Dollar Index to 100.70, down from an intraday high of 101.32.
Traders slashed Fed rate-hike odds, with the probability of a July increase dropping to 16% from 40% pre-release. September hike bets also eased to 60% from 74%. The decline in inflation was driven by lower energy prices, but rising oil costs could reverse the trend.