The British pound strengthened to around $1.356, remaining close to a three-month high as investors assessed the latest UK inflation and labour-market data. Consumer inflation accelerated to 2.9% in July from 2.6% in June, matching expectations, while core inflation remained unchanged at 2.6%. The figures prompted traders to modestly reduce expectations for a Bank of England rate hike later this year. Earlier labour-market data showed unemployment holding at 4.9%, above forecasts, while payroll employment declined by 86,000 year-on-year. Regular earnings growth remained relatively firm at 3.5%. Despite signs of resilience in the UK economy, elevated oil prices and uncertainty surrounding the US-Iran conflict continue to pose risks to the inflation outlook. Meanwhile, the dollar index remained near multi-month lows, providing additional support to sterling. Softer US economic data led investors to scale back expectations for further Federal Reserve tightening, weighing on the dollar.