British Pound clings to 1.3300 as UK inflation test threatens recovery
- GBP/USD holds above 1.3300 despite persistent bearish pressure.
- December Fed hike odds reach 91% as Treasury yields climb.
- UK CPI and employment data could reshape November BoE expectations.
The Pound Sterling (GBP) holds steady against the US Dollar (USD) at the start of the week, with this week’s UK inflation data likely to influence its near-term direction amid elevated energy prices linked to the US-Iran conflict. At the time of writing, GBP/USD holds above 1.3300, up 0.07%.
GBP/USD steadies as rising Treasury yields and December Fed hike expectations limit Sterling's upside
Last week, US inflation data on the consumer and producer side was higher than expected and was noted by the White House National Economic Adviser Kevin Hassett, who said at CNBC that inflation looks like “it is needing some work.”
Despite this, speculators trimmed their Fed-hawkish bets for the October meeting but seem certain that the US central bank will raise interest rates by 25 basis points in December, with odds at 91%, according to Prime Terminal.
Meanwhile, the US Dollar Index (DXY), which measures the buck’s performance against six currencies, gains 0.13% to 101.91. US Treasury yields are also rising, with the US 10-year T-note up 4.6 bps at 5.127%.
Global yields are jumping, driven by France’s riots, which sent yields on French debt higher, amid growing unrest over fiscal policy and next year's election.
In the US, the economic docket is light with Fed speakers entering the blackout period ahead of the October 27-28 meeting. Housing data, the ADP Employment Change 4-week average, jobless claims and S&P Global Flash PMIs could dictate the Greenback’s direction, along with geopolitics.
In the UK, the schedule is busy, with the release of jobs and inflation data on Tuesday and Wednesday, respectively, a speech by Bank of England (BoE) Governor Andrew Bailey and Retail Sales data.
BoE Governor Bailey noted on Friday that energy prices seem to have had “limited wider effects on British prices,” but warned that it’s too soon to “draw firm conclusions”
UK GDP surprised investors, with the economy growing solidly in August. In the meantime, eyes are on the release of the Autumn Budget next week, which poses downside risks to the British Pound if Chancellor John Healey fails to deliver growth without missing the fiscal goals set by his predecessor, Rachel Reeves.
GBP/USD Price Forecast: Technical outlook
In the daily chart, GBP/USD trades at 1.3319, holding a mildly bearish near-term bias as it remains capped beneath a dense cluster of longer-term simple moving averages (50, 100 and 200-day SMA) and a descending trend line around the mid‑1.34s. The pair has slipped back under the most recent break level while the Relative Strength Index (14) hovers just above 50, hinting at only modest upside momentum that so far has not been strong enough to challenge the overhanging resistance structure.
On the topside, initial resistance is seen at the downward trend line coming in near 1.3408, followed closely by the 50, 100 and 200-day SMA cluster around 1.3414, where a daily close above would be needed to ease the current bearish pressure and open the way toward the next ascending trend-line barriers near 1.3612 and 1.3798. On the downside, immediate support aligns with the prior descending resistance line now turned floor around 1.3275, and a break back below this level would expose the pair to a deeper retracement toward earlier cycle lows.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.18% | 0.09% | 0.27% | -0.36% | -0.52% | -0.27% | 0.24% | |
| EUR | -0.18% | -0.10% | 0.11% | -0.54% | -0.71% | -0.44% | 0.06% | |
| GBP | -0.09% | 0.10% | 0.17% | -0.46% | -0.64% | -0.37% | 0.15% | |
| JPY | -0.27% | -0.11% | -0.17% | -0.60% | -0.86% | -0.52% | 0.00% | |
| CAD | 0.36% | 0.54% | 0.46% | 0.60% | -0.14% | 0.09% | 0.60% | |
| AUD | 0.52% | 0.71% | 0.64% | 0.86% | 0.14% | 0.25% | 0.78% | |
| NZD | 0.27% | 0.44% | 0.37% | 0.52% | -0.09% | -0.25% | 0.52% | |
| CHF | -0.24% | -0.06% | -0.15% | -0.00% | -0.60% | -0.78% | -0.52% |
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
Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.
