The British Pound weakens against the US Dollar as investors await a key inflation report influencing Fed rate decisions.
GBP/USD fell to around 1.3500 in Asian trading on Wednesday, extending losses as the US Dollar gained ahead of a critical inflation report. The data is expected to shape the Federal Reserve’s next interest rate move, with markets divided on the central bank’s trajectory after its July rate hold.
Expectations for a 25-basis-point hike in September have softened, dropping to 48% from 52% the previous day, per the CME FedWatch Tool. Rising crude oil prices had fueled speculation of a more aggressive Fed stance, but geopolitical tensions added uncertainty.
Market sentiment was briefly lifted by reports of US-Iran diplomatic progress but soured after the White House demanded reparations from Tehran, injecting caution into trading.