Pound Under Pressure as US Dollar Strengthens Ahead of Key Data Releases
The British pound is under significant pressure against the US dollar as investors await key economic data releases from the United States. The GBP/USD pair continues to trade near two-month lows, hovering around 1.3200 after hitting a low earlier in the day.
Rising expectations of Federal Reserve rate hikes and safe-haven demand have bolstered the U.S. dollar, while persistently high Treasury yields are weighing on the pound. The primary driver behind the strengthening dollar is market bets on another Fed rate hike in October.
The key source of downward pressure on GBP/USD stems from the widening US interest-rate premium, rather than any single piece of UK economic data. Market participants are closely watching the release of U.S. Personal Consumption Expenditures (PCE) price index and second-quarter GDP final estimate for clues on future monetary policy.