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Pound gains versus dollar as US inflation prints cool Fed bets

GBP/USD last traded around 1.3503, supported by weaker US PPI and higher-than-expected jobless claims that tempered expectations for a September Fed move.

Reported · Written up by our desk · Major Pairs

The British pound edged higher against the US dollar after US inflation data came in soft, keeping pressure on already-hawkish bets for the Federal Reserve. FXStreet said GBP/USD was trading near 1.3503, up about 0.06%. US producer prices for July slowed to 4.7% year over year, down from 5.5% and below forecasts of 4.9%. Core PPI, excluding volatile items, also eased to 4.2% from 4.7%, aligning with expectations, while the US Dollar Index slipped 0.14% to 99.83. The report also pointed to labor-market cooling, with initial jobless claims for the week ending August 8 rising to 208,000 from 200,000 and above the 202,000 estimate. Taken together with the more benign inflation readings on both consumer and producer measures, the data could reduce the odds of a rate hike at the Fed’s September 16 meeting. Money markets, according to the outlet, priced in about a 60% chance of a Fed hold, with only a slim probability of a 25-basis-point increase. The piece also noted that UK growth remained steady, with GDP rising 0.4% in Q2, and highlighted upcoming sentiment and inflation data that could influence risk pricing and expectations for Bank of England policy.

Latest closeGBP/USD 1.349 ▼0.1%|Dollar index 99.99 ▲0.2%

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