Pound Slips Below 1.3650 Ahead of Crucial US Inflation Data

The British pound slipped below 1.3650 against the US dollar on Thursday as investors waited for the release of the US Personal Consumption Expenditures (PCE) price index, a crucial data point for the Federal Reserve's monetary policy decisions.

The PCE report is closely watched by traders and investors because it influences expectations for US interest rates. If inflation is higher than expected, the Fed may keep rates elevated, which would typically strengthen the US dollar and weaken the pound.

Conversely, a lower-than-expected reading could lead to rate cuts, supporting the pound against the dollar.