GBP/USD Surges to Three-Month High on UK Data and Weaker Dollar
The GBP/USD currency pair has reached a three-month high of 1.3613 after a series of economic data releases from the UK and US.
In the UK, consumer inflation accelerated to 2.9% in July, exceeding June's 2.6%, while core inflation remained steady at 2.6%. The labour market data showed unemployment holding at 4.9%, above forecasts, with a decline of 86,000 year-on-year in payroll employment.
The Bank of England rate hike expectations have slightly scaled back following the release of these figures.
A weaker dollar is also supporting the pound due to soft US economic data that has led investors to reduce expectations of further Federal Reserve tightening. However, elevated oil prices and geopolitical uncertainty continue to pose inflation risks for the UK.