British Pound shakes off US CPI jolt as UK growth steals spotlight
- GBP/USD rebounds from US CPI-driven dip as Dollar strength fades.
- Fed hike odds jump to 88% after in-line inflation.
- UK GDP beat helps Sterling steady before BoE decision.
The Pound Sterling (GBP) climbs slightly against the US Dollar (USD) on Friday, up 0.10%, as the latest US consumer inflation report came in line with forecasts, and although money markets have increased the odds of a Federal Reserve (Fed) rate hike next week, traders faded the initial reaction. At the time of writing, the GBP/USD pair trades back at 1.3524 after dipping to around 1.3470 on the Consumer Price Index (CPI) release.
GBP/USD recovers after US CPI as UK GDP surprises higher
The US CPI in August rose 0.4% MoM and, on an annual basis, expanded by 3.4%, with both figures matching forecasts. Core CPI rose 0.3% above estimates of 0.2% and, in the twelve months to August, it was 2.4%, down from July’s 2.5% print and aligned with forecasts.
The market’s initial reaction was to Dollar strength, but so far, most G8 FX currencies have recovered. The US Dollar Index (DXY), which measures the buck’s value against a basket of six currencies, clings to 99.00, down a minimal 0.05%.
Money markets are pricing in an 88% chance that the Fed will increase its Fed funds rate by 25 basis points to the 3.75%-4% range, according to Prime Terminal. A day ago, the odds were close to 60%.
In the meantime, US households are growing less optimistic about the economy, as shown by the University of Michigan Consumer Sentiment survey for September, with the index falling from 51.7 to 47.8, missing forecasts of a 51 reading. Joanne Hsu, the survey’s director, commented that “With a resurgence in fuel prices and trade tensions, consumers anticipate greater pressures on their pocketbooks to come.”
Inflation expectations jumped sharply: for one year, to 4.6% from 4%, and for five years, ticked up a tenth, from 3.3% to 3.4%.
In the UK, Gross Domestic Product (GDP) figures showed that the economy grew at its fastest pace in 18 months in July, by 1.6% YoY, above estimates of 1.2%, up from the previous reading of 1.1%. On a monthly basis, GDP grew 0.4%, exceeding projections of 0% and up from June's 0.3%
Given the backdrop, money markets expect the Bank of England (BoE) to leave rates unchanged, despite the UK’s status as a net energy importer. On Tuesday, BoE Governor Andrew Bailey stated that, while markets anticipate further tightening, he aimed to clarify that rate hikes are not imminent.
Next week, traders' eyes are on the Federal Reserve monetary policy decision on Wednesday, followed by the BoE on Thursday.
GBP/USD Price Forecast: Technical outlook
In the daily chart, GBP/USD trades at 1.3525, holding a constructive bullish bias as price stays above a dense band of technical supports. The pair sits over the latest simple moving average cluster around 1.3479 and clings to the rising trend-line support from 1.3140 near 1.3459, while prior descending trend barriers around 1.3466 and the earlier 1.3360 break area now underpin the market. The Relative Strength Index (14) near 50 suggests neutral momentum, hinting that bulls are defending the floor but lack strong directional conviction for now.
On the downside, immediate support is located at the current price area of 1.3525, with secondary demand emerging from the moving average region around 1.3479 and the nearby trend-line supports clustered between 1.3466 and 1.3459, ahead of the former breakout zone at 1.3360. On the topside, the next notable resistance is the rising trend-line barrier coming in around 1.3678; a daily close above this level would strengthen the bullish outlook and open the way toward higher highs, while failure to clear it would keep GBP/USD confined to its current consolidation band. (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 Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | -0.09% | -0.55% | 0.29% | -0.23% | -0.31% | 0.37% | |
| EUR | -0.06% | -0.15% | -0.59% | 0.23% | -0.29% | -0.41% | 0.31% | |
| GBP | 0.09% | 0.15% | -0.44% | 0.39% | -0.14% | -0.24% | 0.47% | |
| JPY | 0.55% | 0.59% | 0.44% | 0.86% | 0.33% | 0.21% | 0.92% | |
| CAD | -0.29% | -0.23% | -0.39% | -0.86% | -0.53% | -0.64% | 0.07% | |
| AUD | 0.23% | 0.29% | 0.14% | -0.33% | 0.53% | -0.11% | 0.58% | |
| NZD | 0.31% | 0.41% | 0.24% | -0.21% | 0.64% | 0.11% | 0.72% | |
| CHF | -0.37% | -0.31% | -0.47% | -0.92% | -0.07% | -0.58% | -0.72% |
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).
(This story was corrected on September 11 at 17:08 GMT to say that "in the twelve months to August, it was 2.4%, down from July’s 2.5% print and aligned with forecasts." instead of "stood at 2.4%, unchanged from July’s number and aligned with forecasts.")
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.
