GBP/USD: Sterling Trapped in Range as US Data Takes Centre Stage
The Pound Sterling's recent trading has been dominated by US economic data and its impact on interest rate expectations, rather than domestic factors.
Monday's session saw a reclaim of the moving-average band that had capped every rally since mid-July, but price action has since traded within this range, with GBP/USD hovering near 1.3450.
The latest US economic data, including private payrolls and the Institute for Supply Management (ISM) services employment index, showed a softer-than-expected reading, which trimmed odds on a September interest rate hike in the UK from the high sixties to the high fifties.
However, a second soft labour reading in three days, combined with a contracting services employment index, could force the question of whether the Bank of England will raise rates in September into the open.