The British Pound is trading up 0.1% at 1.3403 against the US Dollar during Wednesday’s European session, gaining momentum as the greenback faces renewed selling pressure. Market participants are scaling back expectations for Federal Reserve interest rate hikes following softer-than-expected US Consumer Price Index data, weakening the Dollar’s appeal across major currency pairs.
The GBP/USD pair is benefiting from this shift in Fed policy expectations, with technical analysts now eyeing the 1.3500 level as the next upside target. The cooler inflation reading has prompted traders to reassess the likelihood of aggressive Fed tightening, creating a more favorable environment for Sterling. Currency markets are reacting swiftly to the data, with the Dollar’s weakness providing tailwinds for the Pound during European trading hours.
FXnCO Insight
Traders should monitor the 1.3500 resistance level closely for potential long positions in GBP/USD, while remaining alert to any reversal in Fed rate expectations that could quickly restore Dollar strength.
Source: FXStreet