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GBP/USD slips toward 1.3225 as US yields and Fed expectations weigh

Markets are pricing nearly a 47.1% chance of a Fed hike in October and a 92.5% chance in December, according to CME FedWatch.

Reported · Written up by our desk · Major Pairs

GBP/USD lost momentum in early European trading on Wednesday, falling to around 1.3225.

FXStreet attributes the move to support for the US dollar from surging US Treasury yields and expectations that the Federal Reserve will stay hawkish.

The outlet points to commentary from Fed officials including Chicago Fed President Austan Goolsbee, who said inflation above the Fed's target is a dangerous situation that may require policy action, and Fed Governor Michael Barr, who warned that further rate increases will likely be needed to slow inflation.

FXStreet also notes that the CME FedWatch Tool shows markets pricing nearly a 47.1% odds of a Fed rate hike in October and a 92.5% chance of an increase in December, with US ADP employment and the Personal Consumption Expenditures, or PCE, Price Index later Wednesday seen as key catalysts.

Latest closeGBP/USD 1.325 ▲0.1%

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