GBP Surges Past Three-Month High on US Rate Hike Odds

The British Pound Sterling (GBP) has reached its strongest level since early May, trading just short of $1.3550 against the US Dollar on Tuesday.

This three-month high is largely attributed to developments in the US rather than any changes in Britain's domestic data.

The jobs report released on Tuesday showed that UK unemployment held steady at 4.9%, while employment growth nearly halved to 83K from 147K, and regular pay growth accelerated to 3.5% in the three months to June.

In contrast, US Federal Reserve futures now price a September interest rate hike near 31%, down from above 82% in late July, following weaker-than-expected economic data releases.