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British Pound slips as 2004-era US yields lift the US Dollar

  • GBP/USD retreats as the US Dollar extends gains despite weak confidence.
  • Ten-year yield hits 2004 levels, reinforcing US policy advantage.
  • Split BoE rhetoric leaves Sterling waiting for clearer inflation signals.

The Pound Sterling (GBP) drops some 0.38% against the US Dollar (USD) on Tuesday as the latter continues to appreciate, even though US Consumer Confidence deteriorated and jobs data confirmed the strength of the US labor market. At the time of writing, GBP/USD trades at 1.3205, after peaking at 1.3258.

Sterling weakens as resilient US jobs offset collapsing consumer confidence

The Conference Board reported that confidence fell to 81.9 in September, below estimates and the lowest level since 2014. The survey showed households' anxiety about the high cost of living as gasoline prices rise. Dana Peterson, the chief economist of the Conference Board, wrote, “References to prices, the high cost of goods and services, and oil and gas prices in particular, rose to new heights.”

Other data showed that job openings fell in August, though layoffs remained low, reaffirming that the US labor market could withstand further tightening by the Federal Reserve (Fed).

In this backdrop, the US Dollar Index (DXY), which measures the performance of the Greenback against a basket of six currencies, is up 0.29% at 101.47, a headwind for Sterling, which has failed to be underpinned, despite money markets expecting a rate hike by the BoE.

Also, US Treasury yields continued to rise, with the US 10-year Treasury yield reaching levels last seen in 2004 at 5.285%, up five basis points.

BoE members split between holding or raising

Across the pond, the UK Prime Minister said his government would honor the Labour Party’s manifesto pledge to keep pensions unchanged, but warned that the triple lock would be adjusted by 2030 after the next general election.

Two Bank of England (BoE) Monetary Policy Committee (MPC) members crossed the wires, with Alan Taylor saying that the case for a rate hike “is not compelling" unless energy prices remain high and “generate clearer signals of a transmission into broader inflation persistence.”

BoE’s Catherine Mann said that “inflation staying above 2% is a credibility problem.”

Ahead, the US economic docket will feature the release of the Fed’s favorite inflation gauge, the Core PCE, GDP figures, and further Fed speaking. In the UK, the schedule will feature the release of economic growth data.

GBP/USD Price Forecast: Technical Outlook

Chart Analysis GBP/USD
GBP/USD daily chart

In the daily chart, GBP/USD trades at 1.3213, extending a bearish near-term bias as spot remains decisively under the cluster of major simple moving averages (SMA) and broken trend levels. The 50-, 100- and 200-day SMAs, grouped around 1.3459, sit well above current price and reinforce the idea of a capped market, while the downward-sloping resistance trend lines projecting from 1.3869 and 1.3653 keep the pair locked beneath their respective break levels at 1.3320 and 1.3438. Momentum is stretched on the downside, with the Relative Strength Index (RSI) at 27.6, hinting at oversold conditions that could slow the decline but not yet overturn the prevailing bearish structure.

On the topside, initial resistance emerges at the prior break level near 1.3320, where the earlier descending trend line was pierced, followed by the more recent resistance trend line break at 1.3438. Above these, the grouped 50/100/200-day SMAs around 1.3459 form a dense technical barrier, ahead of the higher former support trend break at 1.3532 and the more distant structural level near 1.3735. With no nearby technical supports mapped below spot in the current dataset, any recovery would likely need to reclaim 1.3320 first to ease immediate downside pressure, while a sustained move above the 1.3438–1.3459 band would be required to challenge the broader bearish outlook.

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

Pound Sterling Price This week

The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the Swiss Franc.

USDEURGBPJPYCADAUDNZDCHF
USD0.39%0.18%0.08%0.36%0.51%0.53%0.79%
EUR-0.39%-0.27%-0.25%-0.04%0.12%0.12%0.38%
GBP-0.18%0.27%-0.17%0.20%0.37%0.36%0.62%
JPY-0.08%0.25%0.17%0.18%0.34%0.35%0.59%
CAD-0.36%0.04%-0.20%-0.18%0.18%0.14%0.43%
AUD-0.51%-0.12%-0.37%-0.34%-0.18%0.02%0.27%
NZD-0.53%-0.12%-0.36%-0.35%-0.14%-0.02%0.26%
CHF-0.79%-0.38%-0.62%-0.59%-0.43%-0.27%-0.26%

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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British Pound slips as 2004-era US yields lift the US Dollar