GBP/USD Bounces After Fed's Warsh Warns of Inflation Risks

The British Pound (GBP) has edged higher against the US Dollar (USD), reaching around 1.3545 during Monday's European trading session. This comes as the US Dollar corrects its strong upside move on Friday, following a speech from Federal Reserve Chair Kevin Warsh at the Jackson Hole Symposium.

Warsh reiterated the upside inflation risks, signaling the Fed's readiness to continue tightening until inflation improves convincingly. According to Rabobank's Elwin de Groot, this formulation underscores the Fed's willingness to extend the tightening cycle if disinflation stalls, reinforcing upside risks around the policy path.

The GBP/USD pair holds a mildly bullish near-term bias as it consolidates directly on the 20-day exponential moving average (EMA) at 1.3543 after a corrective move. The Relative Strength Index (RSI) sits just above the neutral 50 mark, hinting at steady but not overstretched upside momentum.