Sterling retreats some 0.39% as the US Dollar stages a recovery after a US inflation report revealed that prices remained elevated, increasing the chances of seeing a rate hike by the Federal Reserve (Fed) towards the end of the year.
The GBP/USD exchanged hands below 1.3600, after reaching a high near 1.3651
GBP/USD slips as firm PCE, stronger data lift Dollar before Jackson Hole US economic data revealed that the Core Personal Consumption Expenditures (PCE) Price Index in July was in line with estimates and unchanged from June’s 3.3% YoY. Headline PCE steadied at 3.7% YoY, above estimates of 3.6%. Other data showed that the US economy grew at a 1.5% annual pace in Q2 2026 as expected, while Durable Goods Orders doubled June’s print of 0.5%, coming in at 1.1% MoM and exceeding forecasts.
After the data, the US Dollar Index (DXY), which tracks the performance of the buck’s value against a basket of six currencies, is up 0.27%, at 99.17. US Treasury yields also rose, with the 10-year benchmark note edging up four basis points at 4.664%, while investors increased their hawkish bets on the Fed. Money markets had priced in a narrow 39% chance of a rate hike in the September meeting, according to Prime Terminal.