GBP/USD Exchange Rate Holds Firm Amid Fears of US Fiscal Policy Risks

The GBP/USD exchange rate held firm on Tuesday, trading around 1.3630-1.3640 and maintaining its proximity to Friday's six-month high above 1.3670.

Despite the Pound's struggle to extend its advance, the Dollar remains under pressure due to persistent concerns over US fiscal policy, trade tensions, and the credibility of recent Treasury intervention in the bond market.

The Federal Reserve is also facing a delicate situation with inflation still above target and softer US employment, retail sales, and inflation data. Fed Chair Kevin Warsh's Jackson Hole speech later this week will be a crucial test for GBP/USD, which could potentially push Treasury yields higher or revive broader concerns over US fiscal stability.