GBP Dives to Weekly Lows as US Inflation Data Boosts Dollar

The British Pound (GBP) dropped to its lowest point in a week on Thursday, as the US Dollar (USD) strengthened following the release of hot inflation data. The GBP/USD pair traded at one-week lows around 1.3675 during the US session, down over 0.5% from Wednesday's highs.

The Personal Consumption Expenditures (PCE) Price Index rose 3.7% in July, matching expectations and maintaining pressure on the Federal Reserve to hike interest rates before year-end. Core PCE inflation also grew at a steady 3.3%, both figures exceeding the Fed's 2% target.

The data released on Wednesday fueled bets that the Fed may deliver one final rate hike by the end of this year, leaving investors awaiting cues from Fed Chair Kevin Warsh's speech at the Jackson Hole symposium.