GBP Edges Higher on Softer US Inflation, Eyes UK Jobs Data

The British Pound (GBP) gained 0.14% against the US Dollar (USD) on Monday, as investors digested softer-than-expected US inflation data and awaited crucial UK jobs and inflation data. The GBP/USD pair currently trades at 1.3552, having hit a three-month high of 1.3571 earlier in the session.

The recent US inflation data has led traders to believe that the Federal Reserve (Fed) may hold interest rates unchanged at its September meeting, with odds standing at nearly 69%. This view is supported by Prime Terminal, which notes that consumer and producer inflation on the US side has pushed Treasury yields lower.

In contrast, UK economic data is expected to show a rise in employment numbers, with the ILO Unemployment Rate projected to drop from 4.9% to 4.8% in the three-month rolling average to June. The Claimant Count Change in July is also expected to increase from 6.7K to 11.2K.

Regarding UK inflation data, the Consumer Price Index (CPI) is projected to rise from 0.1% to 0.3% month-over-month in July, while on an annual basis it is expected to rise from 2.6% to 2.9%. Meanwhile, core inflation is expected to tick lower from 2.6% to 2.5% year-over-year.