Pound Stalled Below 1.3600; Markets Await Warsh Speech

The pound sterling remained weak against the US dollar during Thursday's Asian trading session. GBP/USD consolidated near weekly lows, held below the 1.3600 mark.

Pressure stemmed from a strengthening US dollar following US PCE inflation data that showed persistently high figures. Annual PCE rose 3.7% through July, slightly exceeding market forecasts.

The data kept the possibility of a Federal Reserve interest rate hike before year-end on the table. This kept the US dollar strong, weighing on GBP/USD.

However, the pound's decline remained limited as US Treasury yields stayed low due to government bond buyback strategies. Additionally, optimism regarding a potential US-Iran deal curbed safe-haven demand for the dollar.

Iran and Oman reportedly agreed on a temporary corridor for commercial vessels in the Strait of Hormuz. Nevertheless, Iran insisted that a full opening would not occur until the US fulfills its commitments under the interim peace agreement.

Newsmaker Analysis: GBP/USD remains vulnerable to downward pressure as long as it stays below 1.360, particularly if Kevin Warsh’s speech at Jackson Hole strikes a hawkish tone. However, if US yields remain low and sentiment regarding Hormuz diplomacy improves, pressure on the pound could be contained, potentially opening the door for a limited rebound. (asd)

Source: Newsmaker.id