GBP/USD Holds Above 1.3550 Ahead of US PPI

For currency markets, the PPI report matters because it feeds directly into bets on how quickly US price pressures are easing. A hotter reading would likely support Treasury yields and the dollar, while a softer outcome could keep pressure on the greenback and give sterling more room to hold recent gains.

Sterling is also drawing support from expectations that the Bank of England will raise rates again this year, keeping the policy backdrop relatively firm versus the US. That rate-gap narrative has helped the pound recover even as the broader dollar stays sensitive to incoming inflation data and Fed pricing.

On the technical side, the pound’s US-listed ETF, FXB, was last at 130.03, above both its 50-day moving average of 129.24 and 200-day moving average of 128.18, while the RSI reading of 36.8 points to a market that is not yet overheated. The dollar ETF, UUP, edged to 28.06 and remains near its own 50-day average, suggesting traders are waiting for a macro catalyst rather than chasing a sustained break.

Adalytica’s trade-signal snapshot shows sentiment on the British pound at 78, labeled greed, versus 60, or neutral, for the dollar, underscoring the market’s bias toward sterling ahead of the data. FX volatility signals are also elevated enough to suggest the move could widen if the PPI surprises.

The next decisive move in GBP/USD is likely to come from the US inflation release, with traders watching whether the data reinforces a softer dollar trend or sends yields and the greenback back up.