GBP/USD Edges Up but Gains Limited Amid Modest Recovery
The GBP/USD exchange rate saw a modest recovery on Thursday after hitting a 20-day low on Wednesday, but gains were limited. At $1.3496, the pair was only marginally higher on the day.
The Pound struggled to establish direction as traders assessed the UK's final services PMI figures. The growth in the crucial sector accelerated to a four-month high in August, but the final figure was slightly below initial estimates.
Gilt yields reached a 19-year high on Wednesday and while they edged lower on Thursday, they remained significantly higher across the week, keeping investors wary of rising UK government borrowing costs. The US Dollar faced pressure as a more positive tone across financial markets reduced demand for the safe-haven 'Greenback.'
A stronger appetite for risk, driven by easing fears over global economic growth and softer expectations for Federal Reserve interest rate hikes, weighed on USD. The probability of a rate hike this month fell from 63% to 60%, adding pressure to the Dollar.