Pound Edges Higher Amid UK Fiscal Reforms and Fed Rate-Hike Expectations

The British Pound gained modestly against the US Dollar on Tuesday as UK Chancellor John Healey introduced measures to bolster economic activity and attract private capital.

The package includes reducing regulatory hurdles for domestic investment, introducing new testing flexibilities for emerging technologies, and handing more authority to city regions to draw in private funding.

Healey emphasized the importance of fiscal prudence and containing rising costs faced by businesses and households. A goal of cutting regulatory costs by 25% before the 2029 general election was also mentioned.

The stronger-than-anticipated August US jobs data has increased expectations that the Federal Reserve could raise interest rates in September, with rate-hike odds moving above 60%. The upcoming PPI and CPI releases will be closely watched to influence the Fed's policy outlook.