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GBP/USD stays near 1.3630 as USD firms on Fed and Iran risks
Traders are looking ahead to US PCE inflation data and a Jackson Hole keynote to guide the next move, with the Fed viewed as having more than a 75% chance of at least one rate hike this year.
GBP/USD extended a two-day sideways consolidation, trading around the 1.3630 area during the Asian session Tuesday, as a firmer US Dollar acted as a headwind for the pair, FXStreet reported.
Market expectations shifted toward a policy hold at the September 15 to 16 FOMC meeting after July US inflation data, but traders are still pricing in an over 75% chance the Fed will raise borrowing costs at least once by year-end, driven by inflation risks linked to volatile crude oil prices.
The dollar also received support from escalating US-Iran tensions. US Treasury Secretary Scott Bessent said the US is launching a campaign to isolate Iran from the global economy and warned that any country doing business with Iran risks facing US sanctions, while Iran’s Supreme National Security Council secretary said Iran would halt all oil exports through the Strait of Hormuz if an economic war continues.
FXStreet said traders remain cautious about taking aggressive USD bets and will instead watch the US Personal Consumption Expenditures (PCE) Price Index on Wednesday and Fed Chair Kevin Warsh’s keynote at the Jackson Hole Symposium on Friday, which could influence the next direction for GBP/USD. Technically, the pair holds a near-term bullish bias above the 200-day SMA, with the 1.3431 level cited as key structural support.
Latest closeWTI crude $82.40 ▲1.4%|GBP/USD 1.354 ▲0.3%