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Pound rises versus dollar as Waller cools hike expectations

GBP/USD was last up 0.37% to about 1.3535 after market odds for a 25 bps Fed hike fell to 54% from more than 60% ahead of US Nonfarm Payrolls.

Reported · Written up by our desk · Major Pairs

The British pound strengthened against the US dollar on Thursday, supported by remarks from Federal Reserve Governor Christopher Waller that pointed to keeping rates unchanged and adopting a more neutral tone on monetary policy. FXStreet said GBP/USD traded around 1.3535, up 0.37%, as the comments helped shift money market pricing.

Waller indicated he would be more inclined to let disinflation continue if upcoming inflation data cools, but he also said he would not hesitate to consider a rate hike if inflation runs hot. FXStreet reported that the repricing reduced the probability of a 25 bps Fed hike, with odds sliding to 54% for a rise and 46% for rates to stay steady.

Economic releases added to the backdrop, with the US ISM Services PMI for August coming in at 55.4, above forecasts of 54.3 and July’s 54.1. FXStreet also cited an uptick in unemployment benefit claims to 206K from 204K, and noted that the number of Americans filing for unemployment benefits came in slightly above expectations.

Traders are now focused on the US August Nonfarm Payrolls report on Friday, FXStreet said. On the technical side, the outlet described GBP/USD holding above the triple simple moving average cluster near 1.3449 and trading with a mild bullish near term bias.

Latest closeGBP/USD 1.348 ▼0.2%

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