GBP Rallies Above $1.3500 as Dollar Weakens on Soft Inflation Data

The British Pound (GBP) has gained ground against the US Dollar (USD), rising above $1.3500, as the greenback's strength falters due to soft inflation data and labor market concerns.

A series of disappointing inflation figures has led investors to doubt the likelihood of an immediate Federal Reserve rate hike, weakening the USD in the process.

The GBP/USD pair has bounced back from its lows at $1.3474, inching closer to a key resistance area around $1.3550, according to technical analysis.

Today's focus is on US Retail Sales and the University of Michigan Consumer Sentiment Index data, which are expected to provide further insight into the US economic outlook, although FX strategists at ING have downplayed their significance, describing them as 'second-tier releases' that would require significant surprises to trigger a meaningful dollar reaction.