GBP/USD Stays Strong Above 1.3450 After UK Inflation Data
The British pound stayed strong against the US dollar on Wednesday, trading above 1.3450 during early European hours. This comes after the latest UK inflation report showed that consumer prices rose 3.4% in May, slightly lower than April’s 3.5%.
Core inflation also came down, which gave the pound some support and helped it recover from earlier losses.
Now, traders are waiting for the US Federal Reserve’s policy decision, expected later today. The Fed is likely to keep interest rates unchanged, but markets are looking for hints about future rate cuts.
Many investors believe the Fed might start cutting rates in September, with another possible cut in October. This belief is putting pressure on the US dollar.
At the same time, ongoing global concerns—especially tensions in the Middle East—are affecting market mood and currency flows.
Impact: The pound could gain more strength if the Fed hints at rate cuts. But if US data improves or global risks ease, the dollar might bounce back.