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GBP/USD falls to July lows as US data lifts USD

The move comes alongside a jump in the US Dollar Index and higher odds of an October Fed rate hike, with GBP/USD trading near 1.3253.

Reported · Written up by our desk · Major Pairs

The British pound fell more than 0.7% against the US dollar, with GBP/USD trading around 1.3253, its lowest level since July 1, FXStreet reported. The decline reflects strengthening sentiment for the greenback after US data showed business activity expanding.

S&P Global’s Flash Manufacturing PMI for September beat expectations, rising to 57 from 53.5, while the Services PMI increased to 58.7 from 56.5, and the Composite PMI climbed to 58.4 from 56. FXStreet also cited Federal Reserve Governor Michael Barr saying additional rate hikes may be needed to bring inflation back to the 2% target.

FXStreet added that rising crude prices linked to fears around a US diesel export ban boosted the dollar because oil is priced in US dollars. The US Dollar Index rose 0.52% above 101.00 for the first time since July 30.

In markets, Prime Terminal data cited by FXStreet showed October Fed rate hike odds at 70%, up from 52% a day earlier. The brief also noted technical pressure on GBP/USD, with the pair trading below key moving averages near 1.3476.

Latest closeWTI crude $91.79 ▼3.0%|GBP/USD 1.323 ▼0.8%|Dollar index 101.16 ▲0.7%

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