The British pound gains against the dollar as Fed rate hike bets fade, with traders eyeing July UK retail sales data for policy clues.
The GBP/USD pair climbed to 1.3645 in early Asian trading on Friday, supported by a softer US dollar amid waning Federal Reserve rate hike expectations. Markets now price a 64% chance of unchanged rates in September, per the CME FedWatch Tool.
UK retail sales data for July, due later Friday, is projected to decline 0.5% month-over-month, following a 1.0% rise in June. A weaker-than-expected print could pressure the pound, as it may reinforce expectations of a less hawkish Bank of England.
The BoE is expected to hold rates at 3.75% for the remainder of the year, according to a Reuters poll. Recent UK inflation and labor market data have already tempered bets on further tightening.