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GBP/USD steadies above 1.3500 as Fed hike odds fade
Soft US PPI data and a lack of CPI surprises reduced expectations for additional Fed hikes, supporting GBP/USD while Middle East risk helps limit USD downside.
FXStreet reports that GBP/USD found some dip-buyers during the Asian session on Friday and has stopped a two-day slide that ended at the weekly low.
The pair is struggling to build on gains beyond the 1.3500 psychological level, as traders scaled back expectations for further Federal Reserve rate hikes after Thursday’s softer US Producer Price Index report.
FXStreet also links support for GBP/USD to signs that US inflation is cooling, noting that Wednesday’s US Consumer Price Index lacked surprises and could give the Fed room to keep rates steady.
However, geopolitical uncertainty tied to the US-Iran standoff, including comments on measures regarding Iran and statements about the Strait of Hormuz, is keeping a geopolitical risk premium that supports the safe-haven USD; UK macro data was mixed and there are no key UK releases due Friday, while the US calendar includes monthly Retail Sales and the Preliminary University of Michigan Consumer Sentiment Index.
Latest closeGBP/USD 1.349 ▼0.2%