Pound Takes a Breather Amid US Data Focus

The British pound took a minor step back in trading on Wednesday as investors awaited key US inflation data and the Jackson Hole keynote by Fed Chair Kevin Warsh.

According to Reuters, sterling fell about 0.2% against the dollar and eased versus the euro after touching a six-month high last week. This year, it's still slightly higher against both currencies, helped by a UK economy that has held up better than expected and relatively high UK government bond yields.

The focus is now on Wednesday's US personal consumption expenditures (PCE) inflation data, due at 12:30 GMT. A surprise in PCE inflation can quickly change expectations for Fed interest rates, pushing US Treasury yields and the dollar up or down.