GBP Retreats from Three-Week High Amid Middle East Tensions

The British Pound has retreated from its three-week high against the US Dollar (USD), as investors weigh rising tensions in the Middle East and their potential impact on oil prices.

Although the GBP/USD pair declined, analysts believe the downside is limited due to decreasing expectations of a Federal Reserve rate hike. The recent release of US jobs data showed a net loss of 23K jobs in July, with the previous month's reading revised lower from 57K to 20K.

This has led to a decrease in the probability of a September rate increase, now seen as less than 45% by traders. However, investors still assign a higher likelihood of at least one 25-basis-point rate hike before year-end due to concerns about recovering oil prices and inflationary pressures.