GBP Holds Steady Amid US Inflation Relief and Geopolitical Tensions
The British Pound (GBP) held steady near 1.3500 on Wednesday after the US inflation report was in line with estimates, bringing relief to the Federal Reserve.
The Fed has been focused on tackling higher prices, and the deceleration of US consumer price index from 3.6% to 3-5% on a yearly basis is seen as a positive development.
The data triggered a reaction in bond markets, with investors now expecting the Fed to hold rates unchanged at the September meeting, with odds standing at 60%, while the odds of a 25-basis-point rise stand at nearly 40%.
However, geopolitics continues to play its role, with negotiations between the US and Iran showing signs of stalling, and the US embassies in the Middle East preparing for extended periods with reduced staff due to the Iran war threat.