Pound Holds Steady Ahead of Key US Inflation Report

The British Pound has held steady above 1.3500 against the US Dollar in the early Asian session on Friday, ahead of the key US August Consumer Price Index (CPI) inflation report later today.

Last Thursday's release of the US Producer Price Index (PPI) showed a rise of 5.4% year-over-year in August, beating expectations of 5.3%. This hotter-than-expected outcome may reinforce Federal Reserve rate hike bets and boost the US Dollar against the Pound.

According to Bank of England Governor Andrew Bailey, the idea that an interest rate hike is inevitable is being pushed back. Markets expect a quarter-percentage-point BoE rate hike by the end of this year and two more for 2027.