Sterling Eyes $1.36 as Fed Bets Fade
The Pound to US Dollar exchange rate has edged higher, reaching its best levels since mid-May. The GBP/USD rate is trading at around $1.3556, up 0.2% from Monday's opening levels.
This comes as investors continue to unwind expectations for further Federal Reserve interest rate hikes. A recent run of softer-than-expected US economic releases has challenged the idea that the Fed will tighten monetary policy in the coming months.
The latest setback came from Friday's US retail sales figures, which revealed an unexpected 0.6% contraction in consumer spending during July. This follows a series of other lacklustre releases, including a much weaker-than-expected July payrolls report and relatively soft inflation data, that have weakened Fed bets.
The UK jobs market will be under the spotlight on Tuesday, with official labour market statistics and inflation figures expected to steer the Bank of England's (BoE) interest rate outlook. A strong employment growth figure could boost Sterling, potentially taking the GBP/USD exchange rate above $1.36.