The British Pound (GBP) has bounced back against the US Dollar (USD), ending a two-day slide. GBP/USD is currently around 1.3393, recovering from a seven-week low of 1.3324. The pound is cautious, trading at 1.3330 against the dollar as the market awaits the US PCE data. This data release adds downward pressure to GBP/USD.

Asian Markets Update

In Asian markets, GBP/USD is steady at about 1.3350. UK inflation risks may help limit the pound’s losses. Concerns about UK inflation and an unclear stance from the Bank of England could lend support to the pound. This article includes forward-looking statements and highlights investment risks. It encourages readers to conduct independent research and warns about potential significant losses in open market investments. The information provided may have errors, and these insights are not investment advice. FXStreet and the author are not responsible for any inaccuracies or losses that may occur. No specific investment recommendations are made. EUR/USD is gaining ground and nearing the 1.1700 mark as the US Dollar weakens. Gold prices are also rising, approaching $3,800, due to dollar pressure and increasing bets on Fed rate cuts. The US core PCE inflation data for August is expected to remain steady.

Market Trends And Predictions

The GBP/USD pair is trading stronger now, around 1.3850. This is a notable improvement from the 1.33-1.34 range that worried investors a few years ago. The weaker US dollar continues to drive this trend. Recent US economic data supports the view of a weak dollar. The August 2025 Core PCE inflation report showed a year-over-year increase of 2.9%, lower than the expected 3.1%. This provides the Federal Reserve with reasons to maintain steady interest rates. In contrast, the situation in the United Kingdom is different. The latest UK inflation data for August 2025 shows the Consumer Price Index (CPI) at 3.5%, still significantly above the 2% target set by the Bank of England. This pressure may lead to another rate hike, creating a clear difference in policy compared to the Fed. For derivative traders, this divergence suggests increased volatility in GBP/USD as we approach the next Bank of England meeting in October. Positioning for more pound strength with call options might be a smart strategy, as markets now see a 70% chance of another UK rate hike. The general weakness in the dollar since late 2024 has influenced the current market conditions. This backdrop explains why other assets are performing well against the dollar. For example, gold continues to hover around the $3,850 level. A less aggressive Federal Reserve reduces the attractiveness of holding dollars, pushing investment into other currencies and commodities. Create your live VT Markets account and start trading now.

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