Traders reduce expectations for a September Fed rate hike after July’s US CPI data undershoots projections.
The British Pound (GBP) climbed 0.35% to 1.3533 against the US Dollar (USD) in European trading, driven by a weaker Greenback. The US Dollar Index (DXY) fell 0.23% to 99.70 as markets scaled back hawkish Fed bets.
Odds of the Federal Reserve holding rates steady in September surged to 65%, up from 25% a month ago, according to the CME FedWatch tool. July’s softer-than-expected US Consumer Price Index (CPI) data fueled the shift, easing concerns over aggressive tightening.
Analysts noted the repricing reflects cooling inflation pressures, though the Fed’s next move remains data-dependent. The GBP was the strongest performer among major currencies against the USD.