Forex
GBP/USD Softens as Rate Hike Bets Rise, UK Jobs Data Looms
The British Pound has lost momentum against the US Dollar, trading near 1.3490 on Tuesday. The rise in expectations of a US Federal Reserve interest rate hike on Wednesday is supporting the USD against the GBP. Additionally, UK jobs data will be released today.
The CME FedWatch Tool now shows traders pricing in a 92.4% chance of a rate hike at the central bank's September policy meeting, up from about 67% before last week's US inflation report. This has led to higher US yields and a stronger USD.
The Bank of England interest rate decision on Thursday will also be closely watched. The UK jobs report is expected to show unemployment at 5% in the three months to July, up from 4.9%, with pay growth including bonuses slowing to 3.9% from 4.1%.