GBP/USD Rises as Cheaper Oil Eases Inflation Worries

The GBP/USD currency pair rose by 0.07% on Monday to $1.3330, marking its second consecutive session of recovery from three-week lows printed on Thursday.

This gain came despite a sharp drop in oil prices, which fell by over 7% to trade between $87 and $92 per barrel. This decline eased worries about energy-driven inflation and tempered expectations for further tightening ahead of the Bank of England's policy meeting on Thursday.

The recent range for the pair is narrow, having retreated from a one-year high of $1.343 reached on July 10 to a low of $1.3165 printed on June 24. The current floor sits at this lower level, approximately 1.25% below spot.

The Sterling rose because investors scaled back Bank of England rate-hike bets, which under normal conditions would be pound-negative. This shift is notable, as it inverts the usual relationship between rate hike expectations and currency movements.