The pound edged 0.3% lower against the dollar (GBPUSD=X) on Friday morning, to trade at $1.3462, as the greenback strengthened ahead of US inflation data, due out later in the day.
The US dollar index (DX-Y.NYB), which tracks the greenback against a basket of six currencies, rose 0.2% to 97.98.
July’s personal consumption expenditures (PCE) price index is due out at 8.30am EDT (1.30pm BST) on Friday.
Derren Nathan, head of equity research at Hargreaves Lansdown, said: “Markets are pricing in around a high probability of a cut by the Fed next month, and today’s PCE inflation numbers will be a key data point for monetary policy setters.”
He said that core PCE in July is expected to have risen from 2.8% to 2.9% on an annualised basis, which would still be ahead of the Federal Reserve’s 2% target.
“Markets are keeping a close eye on the impact of tariffs on the prices of goods and services,” said Nathan. “If inflation comes in hotter than expected, the path towards a drop in US borrowing costs in December will become a little less clear.”
No Comment! Be the first one.