GBP/USD retraced from last week’s highs, settling near the 1.3450 mark as markets reassessed the impact of Powell’s dovish hints. Sterling slipped after the Jackson Hole address stirred expectations of easier Fed policy—now tempered by renewed caution ahead of key U.S. PCE inflation data.
Soft U.S. labor figures bolster rate-cut bets, yet tariff-driven inflation remains a persistent risk. As FX traders navigate consolidation near the 50-day EMA, Cable’s next direction hinges on Friday’s PCE print.
Sterling’s fate now lies in headline U.S. inflation data. Strong PCE numbers could derail rate-cut hopes, strengthening the dollar and dragging GBP/USD lower. Conversely, softer-than-expected inflation could reignite Sterling’s rally.
GBP/USD remains suspended between conflicting signals. In the balance: the Fed’s next move, inflation’s trajectory, and trader sentiment.
The pair’s path in coming days may reveal deeper global economic narratives—and FX’s unfolding chapter.
