Cooler US inflation data reduces Fed rate hike bets, lifting GBP/USD ahead of key UK employment figures.
The GBP/USD pair rose to near 1.3550 in early Asian trading as the US Dollar weakened. Cooler US inflation and retail sales data have trimmed expectations for a Federal Reserve rate hike in September, with traders pricing in just a 35% chance of a move this month.
Markets now assign a 69% probability of a December rate increase, per the CME FedWatch tool. Meanwhile, UK economic resilience has bolstered expectations for further Bank of England tightening, with at least one rate hike priced in for 2024.
Investors await UK unemployment data, forecast to dip to 4.8% in June from 4.9% in May. Stronger-than-expected figures could further support the Pound.