British Pound softens to near 1.3550 on geopolitical tensions, hawkish Fed bets
The GBP/USD pair trades with mild losses around 1.3550 during the early Asian trading hours on Tuesday. The US Dollar (USD) edges higher against the British Pound (GBP) amid ongoing Middle East tensions and Federal Reserve (Fed) Chair Kevin Warsh's hawkish remarks at the Jackson Hole symposium.
The British Pound softened to a near 1.3550 level on Tuesday due to geopolitical tensions and hawkish Federal Reserve (Fed) remarks. The US Dollar (USD) edged higher against the British Pound (GBP) amid ongoing Middle East tensions and Fed Chair Kevin Warsh's strong comments at the Jackson Hole symposium. A US tanker reported being struck by three projectiles while sailing out of the Strait of Hormuz, contributing to rising Middle East tensions.
Fed Chair Warsh warned on Friday that inflation is not slowing significantly, raising bets on a September rate hike. Traders are observing the upcoming US ISM Manufacturing Purchasing Managers Index (PMI) report and August employment data, which could impact the USD. Strategists at Scotiabank highlight a 60% chance of a 25 basis point increase by the next BoE meeting on September 16.
The daily GBP/USD chart trades at 1.3546, above the 100-day SMA at 1.3444 and the lower Bollinger Band at 1.3433, indicating demand during dips. However, the pair is near the Bollinger middle band at 1.3550, acting as a nearby cap, and the RSI at 53.3 suggests steady but not overstretched upside momentum.
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