GBP Holds Steady Ahead of Crucial US Inflation Data

The British Pound held steady above 1.3500 on Friday as traders waited for the US Consumer Price Index (CPI) inflation report, which could offer clues about the Federal Reserve's interest rate path.

Earlier this week, Bank of England Governor Andrew Bailey pushed back against the idea that a rate hike is inevitable, stating that it hinges on economic and geopolitical developments.

The US Producer Price Index (PPI) rose 5.4% year-over-year in August, beating estimates of 5.3%, while the core PPI increased 0.2%, slightly softer than forecast.

Markets expect one quarter-percentage-point BoE rate hike priced in by the end of this year and two more for 2027, according to Reuters.