GBP Edges Higher Against USD Amid Hesitant Fed Rate Hike Bets

The British Pound (GBP) has edged higher against the US Dollar (USD), reaching around 1.3525 during Monday's European trading session. The GBP/USD pair gained ground despite strong Nonfarm Payrolls (NFP) figures for August from the United States Bureau of Labor Statistics (BLS). The US Dollar Index (DXY) remains subdued near 99.10, within Friday's trading range.

The GBP/USD pair is trading with a negative bias for the second straight day, but its price holds above Friday's swing low. This cautious behavior indicates that bears are hesitant to push prices lower. The US Dollar draws support from rising bets for an interest rate hike by the Federal Reserve (Fed) in September due to inflation risks stemming from higher energy prices.

The US-Iran confrontations in the Strait of Hormuz also weigh on the GBP/USD pair, contributing to the safe-haven buck's strength. However, USD bulls seem hesitant and are waiting for this week's US inflation figures before making further moves.