GBP Holds Steady Ahead of US CPI and UK GDP Reports
The British Pound has maintained its position above the psychological mark of 1.3500 against the US Dollar, as traders await crucial macroeconomic data from both the US and UK.
The key events include today's US Consumer Price Index (CPI) report, followed by preliminary Q2 GDP figures from both countries, and the US Producer Price Index (PPI) on Thursday.
Hawkish expectations for the Federal Reserve may continue to support the US Dollar, capping the GBP/USD pair. Strategists at Deutsche Bank highlight that Fed futures point to a 51% chance of a September interest rate hike.
The current balance of risks could shift quickly due to incoming data, making it sensitive to USD pricing. The CME Group's FedWatch Tool indicates that traders are pricing in over a 75% chance of a US central bank rate increase by year-end amid inflation risks.