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Pound rises vs dollar as traders dial back hawkish Fed odds
GBP/USD is up 0.35% near 1.3533 as CME FedWatch shows September hold odds near 65%, up from about 75% odds of two hikes a month earlier.
The British pound strengthened against the US dollar, with GBP/USD up about 0.35% to around 1.3533 during the European session, as the US dollar eased.
FXStreet reports the move reflects traders pricing out a potential Federal Reserve interest rate hike in September. At press time, the US Dollar Index was about 0.23% lower near 99.70, while CME FedWatch indicated odds of the Fed holding steady in September rose to almost 65%, after previously reflecting 75% odds of two hikes.
Soft US consumer price index data for July helped reduce hawkish expectations. Commerzbank said the July CPI was broadly in line with expectations, noting inflation remains above the Fed target but showed no broad-based re-acceleration.
With UK data and inflation set for next week, FXStreet said the pound is expected to trade with high volatility as labor market figures for three months ending June and UK CPI for July are scheduled for release, while GBP/USD trades near 1.3535 after breaking above prior downward resistance, which now acts as support around 1.3451.
Latest closeGBP/USD 1.349 ▼0.2%|Dollar index 99.95 ▼0.1%