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British Pound firms as US CPI countdown tests USD bulls

  • US CPI is expected to accelerate, keeping Fed hikes alive.
  • Softer ADP hiring tempers US Dollar strength before inflation data.
  • BoE tightening bets support Sterling ahead of UK GDP.

The Pound Sterling (GBP) gains 0.31% on Tuesday as the US Dollar (USD) trims some of its earlier losses amid souring risk appetite, with traders awaiting the release of US inflation figures and tensions in the Middle East, tempered by US President Donald Trump's demand on Israel and Iran. The GBP/USD pair trades at 1.3384 after bottoming near 1.3330.

GBP/USD rises as traders brace for hotter US inflation

On Wednesday, the US Bureau of Labor Statistics (BLS) is expected to release the Consumer Price Index (CPI) for May, forecast to jump to 4.2% YoY, exceeding the prior month's 3.8% print. Core CPI inflation for the same period is projected to rise from 2.8% to 2.9% YoY.

Inflation continues to hover around twice the Federal Reserve’s 2% target. Consequently, money markets are pricing 23 basis points of rate increases by the US central bank towards the end of the year.

Earlier, the ADP Employment Change 4-week average showed that private hiring dipped from 35.75K to 29K, following last week's stellar Nonfarm Payrolls report, which showed the addition of 172K Americans to the workforce.

British Pound boosted as markets expect a BoE rate hike

Cable price action has been driven by the performance of the American currency and expectations that the Bank of England (BoE) could tighten policy by at least 45 basis points, according to Prime Terminal data.

The US Dollar Index (DXY), which measures the performance of the buck against a basket of six currencies, is almost flat at 99.93, capping Sterling’s advance.

BoE official Megan Greene commented last week that she sees a case for hiking rates amid broadening inflationary pressures across the economy due to the Iran war.

Ahead in the week, the UK economic docket will feature April Gross Domestic Product (GDP) figures.

GBP/USD Price Forecast: Technical outlook

Chart Analysis GBP/USD
GBP/USD daily chart

In the daily chart, GBP/USD trades at 1.3379, keeping a bearish near-term tone as it holds below the clustered simple moving average around 1.3459 and the broken upward trend-line level at 1.3404, which now acts as overhead supply. The Relative Strength Index (14) around 44 leans modestly bearish, suggesting lingering downside pressure while the broader descending trend line from 1.3869, with an interim trigger near 1.3575, continues to cap recovery attempts.

On the topside, initial resistance emerges at the former uptrend support-turned-barrier near 1.3404, followed by the simple moving average zone around 1.3459, with the downtrend break level at 1.3575 and the 1.3869 origin of the resistance line reinforcing a broader supply band higher up. On the downside, structural support is distant, with the key reference coming in near the uptrend origin at 1.3159, leaving the pair vulnerable to further slippage should sellers regain control below the current area.

(The technical analysis of this story was written with the help of an AI tool.)

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.

USDEURGBPJPYCADAUDNZDCHF
USD-0.09%-0.26%0.10%0.11%0.37%-0.10%0.01%
EUR0.09%-0.15%0.20%0.21%0.51%0.03%0.13%
GBP0.26%0.15%0.36%0.38%0.63%0.19%0.29%
JPY-0.10%-0.20%-0.36%0.02%0.29%-0.19%-0.07%
CAD-0.11%-0.21%-0.38%-0.02%0.27%-0.19%-0.09%
AUD-0.37%-0.51%-0.63%-0.29%-0.27%-0.45%-0.35%
NZD0.10%-0.03%-0.19%0.19%0.19%0.45%0.10%
CHF-0.01%-0.13%-0.29%0.07%0.09%0.35%-0.10%

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

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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