British Pound edges lower as USD steadies above three-month low; downside seems limited
- GBP/USD trades with a mild negative bias as the USD steadies following the overnight slump.
- Hawkish FOMC Minutes, along with geopolitical uncertainties, lend some support to the USD.
- Bets for at least one BoE rate hike in 2026 should act as a tailwind for the GBP and spot prices.
The GBP/USD pair edges lower during the Asian session on Thursday and retreats further from its highest level since May 11, touched the previous day. Spot prices slip below the 1.3600 mark in the last hour, though the fundamental backdrop seems tilted in favor of bulls and backs the case for the emergence of some dip-buying.
The US Dollar (USD) stabilized following the previous day's US bond yields-led slump to a three-month low and turns out to be a key factor acting as a headwind for the GBP/USD pair. The decline in yields came after the US Treasury Department stepped in to provide relief to bond markets and said it would at least double its purchases of longer-dated government debt starting in September.
However, hawkish FOMC Minutes, showing broader support for rate increases, help limit further USD losses amid persistent geopolitical uncertainties stemming from the US-Iran standoff over the Strait of Hormuz. In the latest development surrounding the Middle East crisis, US President Donald Trump said on Wednesday that Washington will impose stricter economic restrictions on Iran.
The British Pound (GBP), on the other hand, draws some support from Wednesday's hot UK consumer inflation figures, which reaffirmed bets for at least one quarter-point interest rate hike by the Bank of England (BoE) before the end of the year. This, in turn, validates the positive outlook for the GBP/USD pair and should hold back bearish traders from positioning for any corrective slide.
Investors now look to the US economic docket – featuring the release of the Philly Fed Manufacturing Index and the usual Weekly Initial Jobless Claims data. Apart from this, speeches from influential FOMC members will drive the USD and provide some impetus to the GBP/USD pair. Furthermore, the incoming geopolitical headlines might contribute to infusing volatility in financial markets.
GBP/USD daily chart
Technical Analysis
The GBP/USD pair’s stance above the 100-day Simple Moving Average (SMA) at 1.3427. suggests a supportive bullish bias. The said support should act as the primary structural cushion in case of a corrective pullback. As long as spot prices hold above this level, the prevailing uptrend could aim to test May swing high near 1.3655.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.92% | -0.54% | -0.54% | -0.49% | -0.41% | -0.76% | -1.55% | |
| EUR | 0.92% | 0.53% | 0.41% | 0.43% | 0.47% | 0.17% | -0.62% | |
| GBP | 0.54% | -0.53% | -0.06% | -0.10% | -0.06% | -0.36% | -1.20% | |
| JPY | 0.54% | -0.41% | 0.06% | 0.04% | 0.05% | -0.24% | -1.06% | |
| CAD | 0.49% | -0.43% | 0.10% | -0.04% | 0.03% | -0.28% | -1.10% | |
| AUD | 0.41% | -0.47% | 0.06% | -0.05% | -0.03% | -0.30% | -1.13% | |
| NZD | 0.76% | -0.17% | 0.36% | 0.24% | 0.28% | 0.30% | -0.84% | |
| CHF | 1.55% | 0.62% | 1.20% | 1.06% | 1.10% | 1.13% | 0.84% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
