The GBP/USD pair remains under some selling pressure for the second successive day on Thursday and drops closer to the 1.2300 round figure, or a fresh
The US Dollar manages to preserve the previous day's post-FOMC recovery gains from over a one-week low and remains well within the striking distance of a six-month high, which, in turn, is seen exerting pressure on the GBP/USD pair. As was widely anticipated, the Federal Reserve decided to leave interestunchanged, though maintained its forecast for rates to peak at 5.5% to 5.75% this year, keeping the door open for one more 25 bps lift-off in 2023.
The higher-for-longer narrative keeps the US Treasury bond yields elevated, which, along with a softer risk tone, continues to underpin the safe-haven Greenback. In fact, the yield on the two-year US government bond shot to a 17-year and the benchmark 10-year Treasury note touched its highest since late 2007. This, in turn, fuels worries about economic headwinds stemming from rapidly rising borrowing costs and tempers investors' appetite for riskier assets.
Market pricing swung drastically after data released from the UK on Wednesday showed that the annual headline CPI fell to 6.7% in August from 6.8% in July, defying consensus forecast for a rise to 7%. Moreover, importantly the core CPI – excluding volatile food, energy, alcohol and tobacco prices – came in at 6.2% in the 12 months to the end of August, down from 6.9% in July.
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