Pound Stays Strong at 1.3575 as Traders Wait for Big Data Showdown
The British pound is holding steady around 1.3575, with traders waiting for two big reports — UK GDP and US Producer Price Index (PPI) for July. Both numbers could shake the forex market in a big way.
If US PPI is higher than expected, it could mean inflation is heating up again, which might push the US dollar higher. That could also make the Federal Reserve think twice before cutting interest rates. On the other hand, if UK GDP is weak, it could hurt the pound and make the Bank of England more cautious about rate cuts.
Right now, market mood is slightly in favor of the pound. Recent US job data shows the labor market is cooling, and many traders believe the Fed could start cutting rates soon. In fact, betting markets now see a 94% chance of a small rate cut in September.
Impact:
* Hot US inflation data could lift the dollar and pull GBP/USD down.
* Weak UK growth could also pressure the pound, adding to downside risk.
