GBP/USD edged up a third of a percent on Wednesday.
UK PPI inflation limited gains, but GBP traders look ahead to more UK data.
Markets have fully priced in a September Fed rate cut.
GBP/USD inched further into fresh highs, testing chart territory north of the 1.3000 handle on Wednesday. Broad-market hopes of a rate cut from the Federal Reserve (Fed) in September kept the Greenback underbid and gave the Pound Sterling (GBP) a leg up in the mid-week market session. Recent Fedspeak has been interpreted as firmly dovish, with market participants seeing the writing on the wall they wish to as Fed officials give a head nod to recent progress on inflation measures. Cable traders will also want to keep an eye out for any knock-on volatility from the European Central Bank's (ECB) Thursday rate call.
Rate markets have fully priced in at least a quarter-point rate trim when the Federal Open Market Committee (FOMC) gathers for a rate call on September 18, and July’s month-end meeting is still expected to keep rates flat. According to the CME’s FedWatch Tool, 98% odds of a September rate cut are fully priced in, with rate traders seeing three cuts in 2024 compared to the Fed’s own modest projections of one or two.
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