Pound Falls to 10-Day Lows Amid Hawkish Warsh Comments
The Pound to Dollar exchange rate (GBP/USD) hit 10-day lows around 1.3525 after Federal Reserve Chair Kevin Warsh's hawkish comments at the Jackson Hole symposium.
Warsh expressed concerns over persistent US inflation, saying that 'we must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed.' He also noted that recent improvements in inflation data are not yet enough to signal a meaningful improvement in underlying price trends.
This has raised the probability of a September Fed rate hike to around 60%, providing renewed support for the Dollar and putting pressure on Sterling. According to UoB, 'The risk remains on the downside, and the level to watch is 1.3480.' The important GBP/USD support area in the 1.3500 range is now under focus.