• GBP/USD bears moving in as the US dollar perks up.
• The Jackson Hole is a key event for the pair where Fed's Jerome Powell will speak.

GBP/USD is under pressure and has moved back to a flat position for the day so far as the US dollar perks up in Tokyo ahead of the Federal Reserve's chairman Jerome Powell speaking at the Jackson Hole later today. 

The US dollar has gained against a basket of currencies on Friday,  but trades below the 20-year high. Chairman Powell will speak at 10.00 ET and investors will be on the lookout for fresh clues on how aggressive the central bank will be in its battle against inflation.

Following a number of critical data events this week, there have been signs that there could be a slowing in inflation and investors have started to pare back the most hawkish of expectations from the Fed. However, the overall sentiment is that the Fed will stay firm on its intent to battle against inflation which remains at 8.5% on an annual basis, well above the Fed's 2% target. Jerome Powell's speech in Jackson Hole will therefore be scrutinized for any indication that an economic slowdown might alter the Fed’s strategy. 

Leading into the event today, Fed funds futures traders are pricing in a 61% chance that the Fed will hike rates by another 75 basis points at its September meeting, and a 39% probability of a 50 basis points increase. The US dollar index DXY was last up 0.11% at 108.53, holding just below a 20-year high of 109.29 reached on July 14. Looking forward, developments in the US dollar, US real yields and central bank policy will continue to dominate the direction of the price of the yellow metal for the remainder of this year and in 2023.

Besides the Fed chair event, traders will be looking to US Personal Consumption Expenditure inflation that is consolidating at high levels and is expected to fall as price pressures gradually abate through this year. ''Consequently, personal spending will remain at risk as inflation continues to erode the purchasing power of household’s personal income,'' analysts at Westpac argued.