GBP Gains Ground as Hawkish Signals Boost Rate Hike Expectations

The British Pound has made gains for the second consecutive day against the US Dollar, trading around 1.3230 during Asian hours on Monday.

This comes despite hawkish signals from Federal Reserve officials and ongoing geopolitical tensions in the Middle East.

Central bank officials have expressed concerns over persistent inflation, with Cleveland Fed President Beth Hammack warning against allowing elevated prices to become the norm and Philadelphia Fed President Anna Paulson suggesting modest further tightening may be warranted.

This has led money markets to price in a 65.9% chance of a benchmark rate hike at the October Fed meeting, up from 57.6% last week and just 9.4% a month ago.