British Pound falls below 1.34 as hot CPI puts 50-bps Fed hike in play
- GBP/USD drops over 0.40% to 1.3396 as selling pressure intensifies.
- US Core CPI rises 0.3% MoM, exceeding the 0.2% forecast.
- Waller considers 50-bps hike if Core CPI hits 0.3% MoM.
The Pound Sterling dives over 0.40% against the US Dollar on Tuesday as US inflation suggests the Federal Reserve’s (Fed) job is not done. Fed Governor Waller was hawkish, hinting that a 50-basis-point (bps) hike would be warranted if the core CPI came in at 0.3% MoM, with the data fulfilling his forecast. The GBP/USD trades at 1.3396.
GBP/USD retreats as hotter-than-expected US inflation supports Waller’s case for a larger rate hike
The US Bureau of Labour Statistics (BLS) reported that the Core Consumer Price Index (CPI) for October rose 0.3% month over month, above the 0.2% estimate. Headline CPI retreated from 0.6% in September to 0.4% MoM but remained above forecasts of 0.3%.
Governor Christopher Waller said that the economy is strong, with a stable labour market, but inflation is too high. He said that if October’s inflation showed an improvement, he would go for a 25 bps rate increase, but if the reading is like the last two months, he would go for a 50 bps increase.
Following Waller’s remarks, the odds for a 25 basis points rate increase rose to 85%, while for a 50 bps are at 14%, according to the CME FedWatch Tool.
In the UK, BRC Like-For-Like Retail Sales in October improved from 1% to 1.1% but missed forecasts of 1.2%. Eyes move to the release of the Gross Domestic Product (GDP) figures on Thursday, with estimates that the economy grew 0.7% QoQ in Q3.
Ahead the US economic docket will feature Initial Jobless Claims, housing data and Fed speakers on Thursday.
GBP/USD Price Forecat: Technical outlook
In the daily chart, GBP/USD trades at 1.3376 and remains capped in the near term, with spot holding beneath a tight cluster of the 50-, 100- and 200-day simple moving averages (SMAs) around 1.3453–1.3457. Price is hovering just above a descending trend-line support region near 1.3375–1.3226, suggesting the pair is consolidating within a broader corrective downtrend, while the Relative Strength Index (14) around 51 hints at neutral but stabilizing momentum rather than a decisive bullish turn.
On the topside, initial resistance is seen at the 200-day SMA near 1.3453, followed closely by the 100-day SMA at 1.3455 and the 50-day SMA at 1.3457, where a sustained break would be needed to ease the current cap and open the way toward the higher ascending trend-line barriers near 1.3700 and 1.3868. On the downside, immediate support is provided by the nearby descending trend line at 1.3375, with the lower trend-line floor around 1.3226 acting as the next key level, where a clear drop below would reinforce the bearish bias and expose deeper losses.
(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 Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.39% | 0.50% | 0.44% | 0.35% | 0.71% | 0.44% | 0.58% | |
| EUR | -0.39% | 0.10% | 0.07% | -0.03% | 0.31% | 0.05% | 0.18% | |
| GBP | -0.50% | -0.10% | -0.04% | -0.13% | 0.21% | -0.06% | 0.08% | |
| JPY | -0.44% | -0.07% | 0.04% | -0.08% | 0.26% | -0.01% | 0.13% | |
| CAD | -0.35% | 0.03% | 0.13% | 0.08% | 0.35% | 0.08% | 0.22% | |
| AUD | -0.71% | -0.31% | -0.21% | -0.26% | -0.35% | -0.27% | -0.13% | |
| NZD | -0.44% | -0.05% | 0.06% | 0.00% | -0.08% | 0.27% | 0.14% | |
| CHF | -0.58% | -0.18% | -0.08% | -0.13% | -0.22% | 0.13% | -0.14% |
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.
