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GBP/USD lifts as softer US CPI cools odds of Fed hikes
CME FedWatch cut the odds of a Fed rate increase this month to 16.6% from 41.7% after June CPI showed slower-than-expected headline and core inflation.
The British pound rose against the US dollar, with GBP/USD up about 0.1% to around 1.3403 in European trading, as the dollar faced selling pressure and expectations for Federal Reserve rate hikes were dialed down. FXStreet said the US Dollar Index, which tracks the greenback against six major currencies, was near 100.87 after recovering from early losses, though it was still holding Tuesday decline.
According to the CME FedWatch tool cited by FXStreet, the probability of a Fed rate increase at this month’s policy meeting eased to 16.6% from 41.7% reported on Monday. The shift followed June US CPI, which showed both headline and core inflation rising at a slower-than-expected pace.
FXStreet also pointed to UK political developments, noting that Andy Burnham is set to replace Keir Starmer on July 20 and will likely appoint a new finance minister, a smooth transition it said is supporting the pound. Technical levels highlighted by the outlet showed the pair trading slightly higher near 1.3400 and holding a mildly bullish near-term bias while above the 20-period EMA around 1.3350.
On FXStreet’s chart view, RSI near 55.93 suggested steady but not overextended upside momentum. Initial support was flagged near the current price area around 1.3401 and the 1.3350 EMA, while a sustained break above 1.3520 was described as the level that could open the door to a push toward 1.3600.
Latest closeGBP/USD 1.339 ▲0.0%|Dollar index 100.94 ▼0.3%