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Pound edges higher as oil slide pressures the US dollar

GBP/USD rose about 0.20% on Friday but was still on track for roughly a 0.7% weekly decline, as traders weighed shifting Fed rate odds and easing US manufacturing data.

Reported · Written up by our desk · Major Pairs

British pound sterling moved higher on Friday, gaining about 0.20% as oil prices slid and weighed on the US dollar. Even with the daily advance, the pair was still poised to end the week down nearly 0.70%, according to FXStreet.

FXStreet linked the move to improving risk appetite tied to efforts to resume US-Iran talks, while noting that market participants largely ignored signals of potential escalation. The report also pointed to US data from S&P Global, where manufacturing activity slipped, with the Manufacturing PMI falling from 53.9 to 53.8 versus an estimate of 54.5.

On the policy outlook, FXStreet said expectations continue to lean toward the Federal Reserve raising rates in 2026. For the July meeting, it cited odds of 59% for keeping rates unchanged at 3.50% to 3.75% and 41% for a hike, with the hike probability up nearly 8% from the prior day.

In the UK, S&P Global PMIs rose versus June across composite, services, and manufacturing, the FXStreet update said. The report added that uncertainty around new prime minister Andy Burnham’s fiscal policy has capped GBP/USD gains, with the Bank of England expected to hold rates unchanged with odds around 88%.

Latest closeGBP/USD 1.331 ▼0.5%

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