Sterling Edges Higher on Weaker Dollar, Iran Tensions Cap Gains
The British pound strengthened against the US dollar during Wednesday's Asian session as weaker US inflation pressured the greenback. US annual consumer inflation slowed to 3.5% in June from 4.2% in May, below the 3.8% forecast, while monthly CPI fell 0.4% after rising 0.5% previously, raising expectations of a less restrictive Federal Reserve. Dollar losses remained limited as renewed US-Iran tensions lifted oil prices and supported safe-haven demand. Markets priced a 50% chance of a September Federal Reserve rate hike and anticipated two Bank of England increases in 2026. Domestically, Andrew Burnham has effectively secured the Labour Party leadership with 349 MP endorsements and needs three more party organizations' backing. At the time of writing, GBP/USD was trading at 1.3409, up 0.13%, while the United Overseas Bank predicted earlier in the day that "current price movements are likely part of a range-trading phase, probably between 1.3360 and 1.3430."
The British pound strengthened against the US dollar during Wednesday's Asian session as weaker US inflation pressured the greenback.
US annual consumer inflation slowed to 3.5% in June from 4.2% in May, below the 3.8% forecast, while monthly CPI fell 0.4% after rising 0.5% previously, raising expectations of a less restrictive Federal Reserve.
Dollar losses remained limited as renewed US-Iran tensions lifted oil prices and supported safe-haven demand.
Markets priced a 50% chance of a September Federal Reserve rate hike and anticipated two Bank of England increases in 2026.
Domestically, Andrew Burnham has effectively secured the Labour Party leadership with 349 MP endorsements and needs three more party organizations' backing.
At the time of writing, GBP/USD was trading at 1.3409, up 0.13%, while the United Overseas Bank predicted earlier in the day that "current price movements are likely part of a range-trading phase, probably between 1.3360 and 1.3430."