The GBP/USD pair drifts lower to around 1.3450 during the Asian trading hours on Thursday, pressured by a modest rebound in the US Dollar (USD). Traders await the preliminary reading of S&P Global Purchasing Managers Index (PMI) reports for August from the United Kingdom (UK) and the United States (US), which are due later on Thursday. On Friday, all eyes will be on the Fed's annual Jackson Hole symposium.

The Greenback strengthens against the Pound Sterling (GBP) on diminishing odds of a Fed rate cut in the September meeting after a jump in US wholesale prices last month. Markets expect the Fed to deliver rate cuts at the next policy meeting, with chance estimates nearly 80% and priced in a total of 52 basis points (bps) of easing over the rest of the year, according to the CME FedWatch tool.

Investors braced for potentially market-moving news from the Fed's annual symposium in Jackson Hole on Friday. If Fed Chair Jerome Powell delivers hawkish remarks or guides a "wait and see" approach, this could boost the USD and act as a headwind for the major pair.

The UK headline Consumer Price Index (CPI) rose 3.8% YoY in July, compared to an increase of 3.6% in June, the Office for National Statistics showed on Wednesday. This reading came in above the market consensus of 3.7%. Meanwhile, the Core CPI, which excludes the volatile prices of food and energy, climbed 3.8% YoY in July versus 3.7% prior, hotter than the 3.7% expected. The monthly UK CPI inflation eased to 0.1% in July from 0.3% in June. Markets projected a decline of 0.1%.

Investors expected a longer wait before the next Bank of England (BoE) rate cut, which might provide some support to the Cable. A quarter-point cut is not fully priced in until March 2026. Earlier this month, the next rate reduction was viewed as highly likely before the end of 2025, per Reuters.

Source: FXstreet