GBP Surges Against USD as Oil-USD Link Breaks Ahead of US CPI
The British Pound has strengthened against the US Dollar, rising by 0.15% to 1.3560 in the North American session on Wednesday. This move comes despite a surge in crude oil prices, with West Texas Intermediate (WTI) breaking above $96.00. The positive correlation between WTI and the Greenback has broken down, as the Dollar weakens.
The US Dollar Index (DXY), which measures the performance of the buck against six major currencies, is down 0.19% at 98.64. Traders are bracing for the release of US inflation data, with both the PPI and CPI reports due out on Thursday and Friday respectively.
Analysts expect a rate hike by the Federal Reserve if both reports exceed forecasts, which would cement the case for a quarter-point rate hike at the September 15-16 meeting. The odds of a rate hike stand at 63%, while hold odds are near 37%. Meanwhile, the Bank of England is expected to hold rates at 3.75% at its September 17 meeting, with odds of 86%.