Global economic woes, hawkish Fed stance drag GBP/USD lower

The GBP/USD pair retreated by 0.18% due to concerns over global business activity and China’s real estate market woes. The US Dollar Index advanced 0.19% to new two-month highs, driven by Powell’s hawkish remarks on inflation and rate hikes at Jackson Hole.

Mixed US economic data, including lower-than-expected Initial Jobless Claims, added complexity to rate hike expectations, keeping traders cautious. The Pound Sterling finished the week on a lower note against the US Dollar, falling to hold above the 1.2600 figure.

The US Dollar Index advanced 0.19%, finishing the week at 104.187. US data showed mixed Durable Goods Orders and a hot labor market, with Initial Jobless Claims rising by 230K, justifying additional rate increases by the US Fed.

Powell emphasized the importance of staying aligned with the Fed’s 2% inflation target and emphasized the need for further tightening measures if positive economic indicators do not show signs of easing. The US economic docket will feature the CB Consumer Confidence, JOLTs report, preliminary GDP data, inflation figures, ISM PMI, and further Fed speakers.