GBP/USD Crashes Below 1.3550 as Fed Hike Odds Surge Above 50%
The GBP/USD exchange rate retreated to one-week lows below 1.3550 after failing to break resistance around 1.3650.
Federal Reserve Chair Kevin Warsh's inflation warnings provided fresh support for the Dollar, and markets now see a greater than 50% chance of a September Fed rate hike.
Lloyds Bank sees scope for Pound to Dollar (GBP/USD) exchange rate gains to at least 1.38 on technical grounds, while Standard Chartered forecasts little change in GBP/USD at 1.36 on a 12-month view.
The Fed's outlook will be crucial, with Warsh expressing concerns over inflation and suggesting the Fed may need to act if prices do not cool down.