GBP Stabilizes Ahead of US Inflation Data Release

The British Pound has remained stable above 1.3500 against the US Dollar ahead of the release of the August Consumer Price Index (CPI) inflation data in the United States.

The US Producer Price Index (PPI), a measure of wholesale prices, rose 5.4% year-over-year in August, surpassing market expectations of 5.3%. The Bank of England's Governor Andrew Bailey had earlier pushed back against the idea that interest rate hikes are inevitable, citing economic and geopolitical developments.

Traders are awaiting the CPI inflation data on Friday, which is expected to show a rise of 3.4% in August for the headline CPI, while the core CPI is projected to increase by 2.4%. A hotter-than-expected outcome could reinforce Federal Reserve rate hike bets and boost the US Dollar against the British Pound.