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Pound extends gains as dollar softens before US inflation data
GBP/USD was near 1.3540 and traders are weighing Thursday’s US PPI and Friday’s CPI for clues on the Fed outlook.
The British pound extended a winning streak for a fifth straight day against the US dollar, with GBP/USD trading around 1.3540 during Asian hours on Thursday, as FX market participants shifted focus to upcoming US inflation releases. FXStreet said traders are watching Thursday’s US Producer Price Index (PPI) data and Friday’s Consumer Price Index (CPI) for indications of the Federal Reserve’s monetary policy path. That attention comes after recent stronger US jobs data helped push up expectations, with the CME FedWatch Tool pricing about 60% odds of a rate increase at the Fed’s meeting next week.
The report also pointed to UK housing market conditions, noting that the RICS UK Residential Market Survey house price balance improved to -28% in August 2026 from a revised -29% in July, a five month high. RICS said activity indicators are becoming less negative, though any recovery remains fragile, with property prices still expected to fall over the next three months before stabilizing over a 12 month horizon.
In commentary cited by FXStreet, Scotiabank strategists said the near term UK policy outlook still looks cautious, arguing the market is pricing very little chance of a policy adjustment at the Bank of England’s meeting next Thursday. They added that despite the pound’s firmness, pricing still reflects a gradual tightening path into year end, around 17 basis points for November 5 and a cumulative 32 basis points by December 17.
Latest closeGBP/USD 1.355 ▲0.1%