GBP/USD Stalls as Mixed US Data Keeps Fed Hawkish Bets Alive

The British Pound has stalled in its trading against the US Dollar on Tuesday following mixed economic data from the United States. The ISM Manufacturing PMI for August was reported at 54.6, down from 55.6 in July and missing forecasts of 55.2. New orders slowed while input prices remained high, indicating that the Federal Reserve may raise interest rates to combat inflation above the 2% target.

According to recent comments by Fed Chair Warsh, there is still 'work to do' regarding price stability. The US labour market has been seen as solid, with vacancies increasing to 7.217 million in July, below forecasts of 7.3 million. This mixed data keeps hawkish bets alive for the Federal Reserve.

In contrast, the Bank of England's Monetary Policy Committee member Catherine Mann said that interest rates should be 'a little bit too high and then correct if necessary.' The UK's manufacturing activity expanded at its slowest rate since March, driven by higher energy, input, and commodity prices. Retailers have raised prices the most since 2024.

Traders are now looking to the parliament's return this week for clues on how new Prime Minister Andy Burnham will fund his plans ahead of the October budget. The GBP/USD trades at 1.3540, down a modest 0.06%.