Pound Sterling Stalls Near 1.35 as Traders Wait for US Inflation Data

The Pound Sterling is trading near 1.35 against the US Dollar as traders wait for the week's main global catalyst: US inflation data. The market is still in a state of uncertainty, with some speculating that the Federal Reserve may raise interest rates again in September.

Oil prices have pushed higher due to renewed Gulf tensions and shipping attacks, with Brent crude oil nearing $90 per barrel. This has led to increased demand for safe-haven assets like the US Dollar, causing it to regain some ground against the Pound.

The Bank of England's recent decision to keep interest rates at 3.75% and its warning about high energy prices have added to the uncertainty surrounding the Pound's performance. The UK's growth package will be a crucial test for the Pound, with the release of second-quarter GDP data on Thursday expected to provide valuable insights into the economy.

The US Dollar has also been influenced by the potential for another rate hike in September, with traders remaining split over whether inflation data will support or weaken the case for further tightening. A soft CPI print would likely keep GBP/USD pointed towards recent highs, while a stronger figure could make it harder to hold above 1.35.