The pair holds near a six-month high ahead of key US inflation figures and Fed Chair remarks later this week.
The GBP/USD pair retreated slightly in Asian trading on Wednesday, slipping below the mid-1.3600 level after strong gains earlier in the week. Despite the pullback, the pair remains close to a six-month peak reached last Friday, as investors await the US Personal Consumption Expenditures (PCE) Price Index data for fresh direction.
Market focus has shifted to the US inflation report and Federal Reserve Chair Kevin Warsh’s speech at the Jackson Hole Symposium on Friday. Both events are expected to provide clues on the Fed’s interest rate path, with recent softer inflation and labor market data fueling expectations of a policy hold at the September FOMC meeting.
DBS Bank’s Philip Wee highlighted a communication gap at the Fed, noting that uncertainty over forward guidance and long-term yield tolerance is weighing on USD confidence. Geopolitical developments in the Middle East also remain a key driver for the dollar’s near-term trajectory.