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Pound rises as USD slips amid Hormuz risk and Labor Day lull
GBP/USD was at 1.3541 after thin trading over the Labor Day weekend, while traders weighed upcoming US consumer and producer inflation data and the Fed outlook.
The British pound rose more than 0.2% against the US dollar as US markets stayed shut for the Labor Day weekend, with trading described as thin. FXStreet said GBP/USD was around 1.3541, after the US and Iran exchanged strikes near the Strait of Hormuz.
FXStreet also pointed to shipping-related developments around the Strait. It said the US launched attacks on three Iranian tankers in retaliation for the IRGC targeting US Navy warships with ballistic missiles, and Iran also cited an Oman deal to manage shipping through the Strait as imminent.
Traders focused on how US inflation prints could shape expectations for Federal Reserve policy. FXStreet noted money markets priced in a 63% chance of a 25 basis point rate increase at the Fed meeting on September 15 to 16.
Technically, FXStreet said GBP/USD kept a modest bullish bias after holding above key moving average levels around 1.3461 and reclaiming former resistance near 1.3369 as support, with the pair around 1.3547 on the daily chart. It cited nearby resistance around 1.3606 and support near 1.3544.
Latest closeGBP/USD 1.348 ▼0.2%