GBP/USD Reverses Gains as Oil Price Shock Returns

The Pound Sterling (GBP) surged to a daily high of 1.3375 on upbeat UK data, but quickly reversed course as investors grew concerned about an oil supply shock sending crude prices higher and reigniting fears of high inflation.

The GBP/USD pair traded at 1.3356, down 0.03%, as the market digested the news that oil prices were increasing due to a potential supply disruption.

The British currency had initially risen on the release of surprisingly strong UK Retail Sales data for August, but this gain was short-lived as investors turned their attention to the impact of higher oil prices on inflation and the economy.