GBP/USD advances for a third consecutive session on Wednesday.
UK Core inflation (August) dropped to 0.9%
US Dollar Index trades mildly lower below 93.00 ahead of the Federal Reserve interest rate announcement.
The GBP/USD continues rising in the European session on Wednesday hitting its highest level in nearly a week at 1.2973. GBP/USD trades up 0.65% at 1.2970.
Earlier, data from the UK’s Office for National Statistics showed that the annual consumer price inflation tanked to 0.9%, down from 1.8%, although higher than forecasts of 0.6%.
Brexit & FOMC’s September meeting
Brexit headlines were unusually offering support to the Pound.
Prime minister Boris Johnson has been trying to calm fears over his controversial Internal Markets bill which was voted through Parliament. Some members from the ruling conservative party could abstain or even vote down the legislation. However, if the wording doesn’t break any international law the pound could rally.
USD weakness is also underpinning GBP/USD. The US Dollar Index settled almost flat on Tuesday, and trades down 0.25%.
After the Federal Reserve’s shift to average inflation targeting, no big changes are expected from the FOMC. The Fed’s Economic Projections and FOMC Chairman Jerome Powell’s press conference will be monitored closely.