GBP Hits Three-Month High as US Sales Data Weighs on Dollar

The Pound Sterling (GBP) surged to a three-month high against the US Dollar (USD) on Friday, as weak US sales data and a dovish Federal Reserve (Fed) stance weighed heavily on the greenback. The GBP/USD pair traded at 1.3545 after reaching 1.3561 earlier in the day.

The British Pound's strength was attributed to traders pricing out hawkish Fed bets, with the possibility of an interest rate hike in September diminishing. This sentiment was reinforced by cooler-than-expected US consumer and producer price data, which limited the Fed's room for further hikes.

Traders will be keeping a close eye on the July Retail Sales report later on Friday, as this could impact the GBP/USD pair's trajectory. The pound's resilience against the dollar is a welcome relief for British traders, who have been anxiously waiting for signs of stability in the currency market.