GBP/USD Forecast and News
GBP/USD holds position above 1.3150 ahead of UK CPI, Fed interest rate decision
GBP/USD inches higher to near 1.3160 during the early Wednesday. Traders await the release of August Consumer Price Index figures from the United Kingdom. Traders will shift their focus on the Federal Reserve interest rate decision scheduled later in the North American session.
Latest Pound Sterling News
GBP/USD Technical Overview
The Relative Strength Index (RSI) indicator on the 4-hour chart stays near 70, suggesting that GBP/USD could turn overbought in case it continues to push higher in the short term. Nevertheless, the pair maintains its bullish bias with the 20-period Simple Moving Average (SMA) rising above slightly above the 100-period SMA.
On the downside, 1.3200 (static level) aligns as immediate support before 1.3150-1.3140 (100-period SMA, Fibonacci 38.2% retracement of the latest uptrend) and 1.3100 (static level). The first resistance could be seen at 1.3260 (end-point of the latest uptrend) before 1.3300 (static level).
Fundamental Overview
GBP/USD started the week on a bullish note and registered impressive gains on Monday. The pair seems to have entered into a consolidation phase above 1.3200 in the European morning on Tuesday. Investors could refrain from taking large positions ahead of key data releases and central bank meetings.
The selling pressure surrounding the US Dollar (USD) fuelled a leg higher in GBP/USD on Monday. The improving risk mood amid growing optimism about a large Federal Reserve (Fed) rate reduction this Wednesday weighed heavily on the USD.
Early Tuesday, US stock index futures trade in positive territory. In case risk flows continue to dominate the financial markets in the second half of the day, GBP/USD could hold its ground.
The US economic calendar will feature Retail Sales data for August later in the day. Investors expect a monthly increase of 0.2% following the 1% growth in July. Although an upbeat reading could support the USD, it is unlikely to have a lasting impact on the currency's valuation before the Fed's policy announcements.
Early Wednesday, the UK's Office for National Statistics will publish Consumer Price Index (CPI) data for August. The Bank of England (BoE) will release the interest rate decision on Thursday.
SPECIAL WEEKLY GBP/USD FORECAST
Interested in weekly GBP/USD forecasts? Our experts make weekly updates forecasting the next possible moves of the Pound-Dollar pair. Here you can find the most recent forecast by our market experts:
GBP/USD: Pound Sterling capitalizes on increasing odds of large Fed rate cut Premium
The Pound Sterling stalled its correction from over two-year highs against the USD and staged an impressive comeback, with the GBP/USD pair having tested the critical 1.3000 threshold.
GBP/USD Big Picture
GBP/USD Bullish Themes
GBP/USD BEARISH Themes
Latest GBP Analysis
Editors' picks
EUR/USD gathers strength above 1.1100, Eurozone inflation data and Fed rate decision in focus
The EUR/USD pair trades on a stronger note around 1.1125 during the early Wednesday. The rising expectation of the US Federal Reserve deeper rate cut provides some support to the major pair. The Eurozone HICP data and the Fed monetary policy meeting will be the highlights on Wednesday.
GBP/USD holds position above 1.3150 ahead of UK CPI, Fed interest rate decision
GBP/USD inches higher to near 1.3160 during the early Wednesday. Traders await the release of August Consumer Price Index figures from the United Kingdom. Traders will shift their focus on the Federal Reserve interest rate decision scheduled later in the North American session.
USD/JPY extends the slide toward 141.00, Fed awaited
USD/JPY extends the decline toward 141.00 in Asian trading on Wednesday, reversing a part of the previous rebound. The BoJ's hawkish signal that it will hike rates again in 2024 contrasts bets for a more aggressive policy easing by the Fed, smashing the pair heading into the Fed event risk.
Gold buyers re-emerge ahead of the key Fed event risk
Gold price is finding some fresh demand near $2,570 early Wednesday, as buyers look to fight back control following the previous day’s correction from record highs of $2,590. Traders, however, could refrain from placing fresh directional bets on Gold price in the lead-up to all-important US Federal Reserve monetary policy announcements.
Crude Oil attempts to pop above $70.00 with US session turning positive
West Texas Intermediate, the US crude Oil benchmark, is trading around $70.85 on Wednesday. WTI price edges higher amid supply disruptions in the Gulf of Mexico and the hope that the Federal Reserve will cut interest rates on Wednesday.
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GBP/USD YEARLY FORECAST
How could GBP/USD move this year? Our experts make a GBP/USD update forecasting the possible moves of the pound-dollar pair during the whole year. Don't miss our 2024 GBP/USD forecast!
2024 GBP/USD FORECAST
In the GBP/USD Price Forecast 2024, our analyst, Dhwani Mehta, notes there are plenty of unknowns and looming uncertainties that make it difficult to convincingly predict the course of the Pound Sterling against the US Dollar (USD) in the year ahead. On both sides of the Atlantic, increased odds of a recession, a dovish pivot in the monetary policies and general elections are foreseen as the key factors driving the GBP/USD price action next year, barring any unprecedented geopolitical risks. Read more details about the forecast.
GBP/USD witnessed a rollercoaster ride in 2023 but the Pound Sterling managed to preserve the recovery gains seen in the first half of the year to a 15-month high of 1.3142.
MOST INFLUENTIAL POLITICAL EVENTS IN 2024 FOR GBP/USD
BoE policymakers continue to push back against expectations of rate cuts next year. However, deteriorating economic performance prompted money markets to begin pricing in four 25 bps rate cuts starting from the summer, anticipating the key rate to be slashed from 5.25% to as low as 4.25% by the end of 2024. The first cut is expected as early as June, to 5.0%.
Even though the Bank of England largely shrugged off a 0.3% contraction in GDP for October, the prospect of a recession in the run-up to a 2024 national election remains high.
A general election is expected next year in the US and the UK, which could fuel intense volatility around the GBP/USD pair. Amidst looming inflation and growth concerns, the political developments on both sides of the Atlantic are likely to be closely followed.
Influential Institutions & People for the GBP/USD
The Pound VS Dollar can be seriously affected by news or the decisions taken by two main central banks:
The Bank of England (BoE)
The Bank of England is the central bank of the United Kingdom. Established in 1694 and privately owned in the beginning, the Bank was nationalised in 1946 so now is completely owned by the UK government. BOE's main reason to be is to maintain monetary and financial stability in the country. Some of its other tasks are producing secure bank notes, operating asset purchase facility and keeping the inflation low and stable. The bank is overseen by the Court, named used to reffer the board of directors, and is accountable to Parliament and the public.
BOE Official Website, on Twitter and Facebook
The Federal Reserve Bank (Fed)
On the other
FED Official Website, on Twitter and Facebook
Andrew Bailey
Andrew Bailey is Governor of the Bank of England since 16 March 2020. He was announced as the new Governor of the BoE on 20 December 2019. Bailey was born in Leicester in 1959 and graduated from Queens' College with a BA in History and a PhD from the Faculty of History, University of Cambridge in 1985. Before becoming the Governor of the BOE, Andrew worked at the Bank in a number of areas, most recently as Executive Director for Banking Services and Chief Cashier, as well as Head of the Bank's Special Resolution Unit (SRU). Previous roles include Governor's Private Secretary, and Head of the International Economic Analysis Division in Monetary Analysis.
Bailey on BOE'S Profile and Wikipedia
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed's Profile and Wikipedia
BOE NEWS & ANALYSIS
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About GBP/USD
The GBP/USD (or Pound / Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. The pair is also called 'The Cable', referring to the first Transatlantic cable that was crossing the Atlantic Ocean in order to connect Great Britain with the United States of America. This term originated in the mid-19th century, which makes it one of the oldest currency pairs.
Pound Sterling - US Dollar represents two economies: British and American (from United States of America). The Cable is a closely watched and widely traded currency pair where the Pound is the base currency and the US Dollar is the counter currency. For that reason, all the macroeconomic data related to the US and the UK affects the price of this pair. One of the events which affected most the volatility of the pound vs. dollar was Brexit.
Related pairs
EUR/USD
The EUR/USD (or Euro Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The popularity of Euro Dollar is due to the fact that it gathers two main economies: the European and American (from United States of America) ones. This is a widely traded currency pair where the Euro is the base currency and the US Dollar is the counter currency. Since the EUR/USD pair consists of more than half of all the trading volume worldwide in the Forex Market, it is almost impossible for a gap to appear, let alone a consequent breakaway gap in the opposite direction.
Normally, the EUR/USD is very quiet during the Asian session because economic data that affects the fundamentals of those currencies is released in either the European or U.S. session. Once traders in Europe get to their desks a flurry of activity hits the tape as they start filling customer orders and jockey for positions. At noon activity slows down as traders step out for lunch and then picks back up again as the U.S. comes online.
USD/JPY
The USD/JPY (or US Dollar Japanese Yen) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: EUR/USD, GBP/USD, AUD/USD, USD/CHF, NZD/USD and USD/CAD. Japanese Yen has a low interest rate and is normally used in carry trades. This is the reason why is one of the most trades currencies worldwide. In the USD/JPY the US Dollar is the base currency and the Japanese Yen is the counter currency. The pair represents American (from United States of America) and Japanese economies.
Trading the USD/JPY currency pair is also known as trading the "ninja" or the "gopher", although this last name is more frequently used when referred to the GBP/JPY currency pair. The US Dollar Japanese Yen usually has a positive correlation with the following two pairs: USD/CHF and USD/CAD. The nature of this correlation is due to the fact that both currency pairs also use the US Dollar as the base currency, such as USD/JPY. The value of the pair tends to be affected when the two main central banks of each country, the Bank of Japan (BoJ) and the Federal Reserve Bank (Fed), face serious interest rate differential.