Pound Slips Below 1.3650 as Markets Await US PCE Inflation Report

The British pound slipped below 1.3650 against the US dollar on Thursday as investors awaited the release of the US Personal Consumption Expenditures (PCE) price index.

The PCE data is a critical indicator for the Federal Reserve's monetary policy decisions, and a hotter-than-expected reading could reinforce the case for slower rate cuts, supporting the US dollar and pressuring GBP/USD.

A cooler print might fuel expectations for earlier easing, potentially lifting the pound.

As of Thursday, the market is pricing in a roughly 60% chance of a 25-basis-point Fed rate cut at the next meeting, according to CME FedWatch.