GBP Holds Firm Above $1.3500 Amid US CPI and Stronger UK Growth

The British pound held its ground above $1.3500 against the dollar on Friday after the release of US inflation data, which met forecasts and sparked a brief initial move that later fizzled out.

The Consumer Price Index (CPI) matched expectations at 2.5%, leading to an initial spike in the pound's value before markets reassessed the policy outlook and money markets lifted the odds of a Federal Reserve rate rise next week.

Despite this, the GBP/USD pair rebounded to $1.3524 by the time of writing after sliding to around $1.3470 on the CPI release. The pound's resilience was also bolstered by stronger-than-expected UK GDP growth in July, which pushed GBP/USD to about $1.3518.

Derivative traders are advised to capitalize on the pound's near-term strength above the 1.3500 level, with one strategy being to buy short-term call options on GBP/USD to capture further upside without committing to heavy spot positions ahead of central bank meetings later this month.