British Pound hits three-month highs at 1.3570 amid generalised US Dollar weakness

The British Pound (GBP) has climbed to three-month highs, trading at around 1.3571, driven by a general weakening of the US Dollar (USD) as investors adjust their positions in response to a more dovish tone from the Federal Reserve (Fed). The pair has surpassed its peak from the previous trading day at 1.3561, indicating a sustained upward bias in the GBP.

This strength is fueled by broader US Dollar weakness, reflecting expectations that the Fed will refrain from raising interest rates in September and likely maintain them for the rest of the year. Recent US economic data, including a 0.6% decline in July retail sales and unexpected job cuts in July, have supported this outlook, with inflationary pressures showing signs of moderation.

The Bank of England's (BoE) focus on maintaining price stability has contributed to market uncertainty regarding the central bank's monetary policy stance, with traders noting potential resistance around 1.3600. The Pound Sterling's resilience is also bolstered by its status as the world's oldest currency and a major player in international forex markets, accounting for 12% of daily forex transactions.