GBP/USD moves above 1.3700, marks fresh multi-year highs

• GBP/USD has reached 1.3724, a fresh high since January 2022, on Thursday.
• Fed Chair Powell warned that Trump's tariff policies could lead to more persistent inflation.
• BoE's Bailey highlighted the risks of slowing wage growth and rising economic inactivity.

GBP/USD extends its winning streak for the fourth successive session, trading around 1.3710 during the Asian hours on Thursday. The pair has marked 1.3724, a fresh high since January 2022, which was recorded on Thursday. The risk-sensitive GBP/USD pair receives support from the improved risk appetite, driven by a fragile US-brokered Israel-Iran ceasefire.

US President Donald Trump noted that the United States (US) and Iran would hold a meeting next week but questioned the need for a diplomatic solution on Iran's nuclear program, citing the damage that American bombing had done to key sites, per Bloomberg.

Moreover, traders assess the cautious remarks from the Federal Reserve (Fed) Chair Jerome Powell. Powell noted on Wednesday that Trump's tariff policies may cause a one-time price hike, but they could also lead to more persistent inflation. The Fed should be careful in considering further rate cuts.

Traders also adopt caution amid speculation that US President Donald Trump may announce a successor for Fed Chair Jerome Powell by September or October. Trump might choose former Fed Governor Kevin Warsh or National Economic Council Director Kevin Hassett, according to the Wall Street Journal.

In the United Kingdom (UK), the Bank of England (BoE) Governor Andrew Bailey stated in his testimony before the Lords Economic Affairs Committee on Tuesday that the central bank has started seeing "labour market softening, and wage settlements are likely to come off," Bailey added that the increase in employers' contribution to social security schemes seems to be "affecting labour market". He also pointed to slowing wage growth and rising economic inactivity.