Stronger-than-forecast US inflation data weighs on the British Pound, pushing GBP/USD to its lowest level in five days.
GBP/USD fell to 1.3603, a five-day low, after US Personal Consumption Expenditures (PCE) Price Index data surpassed forecasts. The pair declined roughly 0.33% as traders reacted to the stronger inflation reading.
The move follows expectations for tighter US monetary policy, with the PCE data reinforcing bets on sustained Federal Reserve hawkishness. Prior prints had shown mixed signals, but today’s release suggests persistent inflationary pressures.
Markets are now pricing in a higher likelihood of prolonged US interest rate hikes, reducing appetite for risk assets and weakening the Pound against the Dollar.