Forex
Pound Slumps as Inflation Fears Rise Amid Energy Price Cap Hike
The Pound to US Dollar exchange rate weakened on Wednesday as investors reacted to the latest batch of US economic data.
The US core PCE price index, the Federal Reserve's preferred gauge of underlying inflation, showed a lack of further progress in bringing inflation towards the Fed's 2% target.
This led investors to increase their expectations for additional monetary tightening later this year, providing a boost to the US Dollar.
The Pound struggled on Wednesday as the announcement of a 4% increase in the UK's energy price cap renewed concerns over pressure on household finances and potential impact on consumer spending and inflation.