GBP/USD jumps above 1.34 as UK GDP meets forecasts, US Dollar trades thin
- GBP/USD climbs 0.59% to 1.3450 after UK Q3 GDP grows 0.1% QoQ and 1.3% YoY.
- UK growth data supports the Sterling despite markets pricing additional Bank of England easing next year.
- Thin liquidity ahead of Christmas amplifies moves amid mixed signals from Fed officials on inflation.
GBP/USD rallies during the North American session on Monday, up by 0.59% after the latest data in the United Kingdom (UK) showed that the economy grew as expected amid thin liquidity trading as investors brace for the Christmas Eve holiday. At the time of writing, the pair trades at 1.3450 after bouncing off from a daily low of 1.3374.
Sterling rallies in holiday-thinned trading after steady UK growth offsets expectations of further BoE easing in 2026
The Office for National Statistics (ONS) revealed that the UK economy grew 0.1% on a quarterly basis in Q3 2025, as expected, and 1.3% YoY, unchanged from the previous period. The data drove GBP/USD above the 1.3400 threshold, even though market participants are speculating that the Bank of England (BoE) would continue to ease policy in 2026.
UK’s inflation eased last week, which influenced BoE Governor Andrew Bailey to join the dovish camp and cut rates. Since then, money markets have priced 37 basis points of easing for 2026, according to the Capital Edge Rate probability tool.
Across the pond, the US economic docket remains scarce with Fed policymakers crossing the wires. Cleveland’s Fed President Beth Hammack remained hawkish, saying that November’s CPI may have underestimated annual price increases because of data irregularities, while adding that the neutral interest rate may be above widely held assumptions.
Recently, Fed Governor Stephen Miran stated that CPI data showed irregularities due to the government shutdown. He added that “recent data aligns with my perspective on current economic conditions,” and that a further reduction in the policy rate “is likely in the future.”
GBP/USD Price Forecast: Technical outlook
The technical picture shows the GBP/USD pair is neutral to upward-biased after reclaiming the 200-day SMA on December 3. Since then, the pair has been fluctuating around the latter, but as of writing, reached a new monthly high of 1.3457, with buyers eyeing a test of the 1.35 figure before year’s end.
In that outcome, GBP/USD could test the October 1 high at 1.3527, followed by the 1.3600 mark. Conversely, if the pair slides beneath 1.3400, expect a test of the 100-day SMA at 1.3369, and of the 200-day SMA at 1.3352.
Pound Sterling Price This Month
The table below shows the percentage change of British Pound (GBP) against listed major currencies this month. British Pound was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.40% | -1.56% | 0.58% | -1.66% | -1.59% | -1.14% | -1.35% | |
| EUR | 1.40% | -0.16% | 2.05% | -0.27% | -0.20% | 0.26% | 0.06% | |
| GBP | 1.56% | 0.16% | 2.45% | -0.11% | -0.04% | 0.42% | 0.22% | |
| JPY | -0.58% | -2.05% | -2.45% | -2.25% | -2.20% | -1.74% | -1.95% | |
| CAD | 1.66% | 0.27% | 0.11% | 2.25% | 0.01% | 0.53% | 0.32% | |
| AUD | 1.59% | 0.20% | 0.04% | 2.20% | -0.01% | 0.46% | 0.26% | |
| NZD | 1.14% | -0.26% | -0.42% | 1.74% | -0.53% | -0.46% | -0.20% | |
| CHF | 1.35% | -0.06% | -0.22% | 1.95% | -0.32% | -0.26% | 0.20% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Author
Christian Borjon Valencia
FXStreet
Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.
