GBP/USD Range-Bound as Hawkish Fed Path Persists

Sterling traded in a narrow range against the US Dollar on Tuesday, as mixed data from the US economy tempered any potential upside for GBP/USD. Business activity slipped in August, which helped keep prices contained throughout the session.

The pair was last quoted at 1.3540, down 0.06% on the day. Meanwhile, expectations of a hawkish Federal Reserve path persisted due to a strong US jobs market, aligning with Chair Warsh's tone and limiting any potential gains in GBP/USD.

With the pair consolidating near the 1.3540 level, derivative traders are advised to prepare for a range-bound market in the short term. Mixed US economic indicators and a hawkish Federal Reserve are likely to keep short-term implied volatility suppressed, making iron condors or short strangle option spreads suitable strategies.