Dollar Strength Lifts Pound Below Key Support Level Amid Hawkish Fed Commentary

The GBP/USD currency pair dipped below 1.3550 on Tuesday morning in European hours, trading around 1.3545 after a brief slip.

This move put the pair in negative territory, with the US dollar gaining strength against the pound due to hawkish remarks from Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium last week.

Warsh emphasized that with inflation running above the Fed's 2% target, the central bank's main focus should be ensuring underlying inflation is moving back to its objective 'at sufficient speed.'

CME FedWatch data shows a 62% probability of another 25-basis-point US rate hike in the coming weeks.