Sterling Weakened by Absence of Domestic Data, Focus Shifts to US Releases
Sterling slipped against both the dollar and euro on Wednesday, as investors looked abroad for direction in the absence of major domestic data. The pound remains relatively firm this year, supported by the UK's resilient economy and elevated bond yields.
The UK currency dropped 0.2% to $1.3625 against the dollar and traded at 85.61 pence per euro, retreating from last week's six-month high of $1.3675. Despite recent softness, sterling rises just over 1% versus the dollar and nearly 2% against the euro year-to-date.
The focus shifted to U.S. releases, with Wednesday's PCE and Friday's Jackson Hole speech seen as key drivers for GBP/USD. The Federal Reserve's preferred inflation gauge, PCE, is due at 1230 GMT, which could influence expectations for the Fed's interest-rate path this year.
The UK economy and high British bond yields have contributed to sterling's performance this year. However, near-term moves are tied to upcoming U.S. data and Federal Reserve signals, rather than domestic catalysts.