GBP Hits Three-Month Highs Amid Dovish Fed Repricing

The British Pound (GBP) has reached three-month highs at 1.3570 against the US Dollar (USD), as investors reassess their bets on a Federal Reserve rate hike. The pair's gains come despite no explicit change in monetary policy, but rather a dovish repricing of expectations.

US Retail Sales fell 0.6% in July, marking the biggest monthly drop since May last year and pointing to a slowdown in consumer spending. This, combined with moderating price pressures, has weakened the US Dollar (USD) against its major counterparts, including the British Pound (GBP).

The Federal Reserve's decision not to hike interest rates this month has reduced bets on an immediate rate increase, undermining USD bulls and supporting GBP/USD prices.