Trading platform Capital.com has highlighted that the upcoming data on the Federal Reserve's preferred inflation indicator could be crucial in determining whether the pound can sustain its recent gains. The pound-dollar exchange rate recently reached a two-and-a-half-year high.

Daniela Sabin Hathorn, an analyst at Capital.com, noted that the pound could appreciate further if Friday’s U.S. PCE data strengthens expectations of a rate cut by the Federal Reserve at its September meeting. However, she cautioned that stronger-than-expected data could lead to a reversal of the pound's recent gains.