Softer US Inflation Data Boosts Pound Against Dollar

The British Pound has seen a modest gain against the US Dollar as softer inflation data from the United States weighed on hawkish bets for the Federal Reserve.

The US Producer Price Index (PPI) in July came in lower than expected at 4.7% year-over-year, while core figures decreased to 4.2% YoY.

This has led to a continued expectation of a 'hold' decision by the Federal Reserve at its September meeting, with some predicting a slim chance of a 25-basis-point rate hike.

Cleveland Fed official Beth Hammack and Richmond Fed President Thomas Barkin expressed hawkish views, but their comments were tempered by the softer inflation data.