Traders await Wednesday’s US inflation report and Thursday’s UK growth figures to guide the pair’s next move.
The British Pound steadies around 1.3500 against the US Dollar in early European trading, near its highest level since July 16. The pair shows little movement as investors await key macroeconomic releases, including US Consumer Price Index data on Wednesday and UK Q2 GDP figures on Thursday.
Market participants are also monitoring geopolitical tensions, particularly the US-Iran standoff, which has lifted oil prices to a one-and-a-half-week high. Iran’s refusal to negotiate with President Donald Trump until January 20, 2029, and disruptions in shipping routes have added to inflation concerns, supporting the US Dollar. Expectations of a Federal Reserve rate hike by year-end further bolster the greenback.
US Treasury yields remain elevated, reinforcing the USD’s strength and capping gains in GBP/USD. The pair’s near-term direction hinges on upcoming economic data and evolving geopolitical risks.