GBP Rises Amid Thin Trading Conditions, Fed Decision Hinges on Inflation Prints

The British Pound rose by over 0.23% amid thin trading conditions as US markets remained closed for Labour Day weekend. The GBP/USD traded at 1.3541.

The escalation of the US-Iran conflict, with both countries exchanging strikes around the Strait of Hormuz, kept the Federal Reserve in play. The USD Index dropped 0.29% to 98.87.

Traders are focused on the upcoming release of US inflation prints, which could impact the Fed's decision on interest rates. A benign reading could deter a rate hike, while a jump in inflation could push the Fed to raise rates despite President Trump's preference for lower rates.