GBP/USD Spikes on Hawkish Fed Signals and BOE Rhetoric

The GBP/USD currency pair rose for a second day on Monday, trading near 1.3230 in Asian hours, as the US Dollar weakened despite hawkish messaging from Federal Reserve officials.

Fed officials have been signaling further interest rate hikes, with money markets now implying a 65.9% probability of a benchmark rate increase at the October Fed meeting, up from 57.6% a week earlier and 9.4% a month ago.

The Bank of England's Governor Andrew Bailey also contributed to the sterling's gains by warning that persistently high energy prices could complicate holding rates steady, and MPC members Sarah Breeden and Clare Lombardelli moved closer to backing a hike due to inflation risks.