GBP/USD consolidates above mid-1.3200s as traders move to the sidelines ahead of BoE this week

GBP/USD struggles to gain any meaningful traction at the start of a new week.
Aggressive Fed rate cut bets cap the recent USD move up and support the pair.
The GBP bulls seem reluctant ahead of the BoE policy meeting on Thursday.

Haresh Menghani FXStreet

The GBP/USD pair kicks off the new week on a subdued note and oscillates in a narrow trading band around the 1.3260-1.3265 area, near a one-week low touched during the Asian session.

The US Dollar (USD) remains on the defensive below a multi-week top amid heightened economic uncertainty on the back of US President Donald Trump's tariff plans and turns out to be a key factor acting as a tailwind for the GBP/USD pair. Adding to this, the prospect of more aggressive policy easing by the Federal Reserve (Fed) further seems to undermine the Greenback.

Despite the better-than-expected release of the US Nonfarm Payrolls (NF) report on Friday, investors seem convinced that the US central bank will resume its rate-cutting cycle in June and lower borrowing costs by 100 basis points by the end of this year. This, along with the optimism over the potential de-escalation of the US-China trade war, dents demand for the safe-haven buck.

Traders, however, seem reluctant to place fresh bullish bets around the GBP/USD pair and opt to wait for this week's key central bank event risk – the Bank of England (BoE) monetary policy meeting on Thursday. The UK central bank is widely expected to cut interest rates by 25 bps and adopt a slightly dovish stance amid downside risks to growth from the trade war.

Apart from this, traders this week will take cues from the outcome of the crucial two-day FOMC policy meeting on Wednesday, which will influence the USD price dynamics and provide some meaningful impetus to the GBP/USD pair. In the meantime, Monday's release of the US ISM Services PMI will be looked upon to grab short-term opportunities later during the early North American session.

Economic Indicator

BoE Interest Rate Decision

The Bank of England (BoE) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoE is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Pound Sterling (GBP). Likewise, if the BoE adopts a dovish view on the UK economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for GBP.

GBP/USD defends 1.3300 after strong UK PMI data

Following Thursday's sharp decline, GBP/USD clings to small gains above 1.3300 in the American session on Friday, supported by the upbeat UK Retail Sales and July PMI data. Nevertheless, the pair's upside remains capped as investors cling to a cautious stance amid a further escalation of tensions in the Middle East. The US July PMI data failed to trigger relevant price action.

EUR/USD remains below 1.1400 after mixed US PMIs

EUR/USD pressures daily lows below the 1.1400 mark in the American session on Friday. Mixed S&P Global PMIs, as manufacturing output contracted while services activity expanded in July, triggered no relevant market reaction. The focus remains in Middle East developments and inflation-related concerns.

Gold holds above $4,050 but momentum still missing

Gold builds on its modest intraday bounce and climbs above the $4,050 level on Friday, hitting a fresh daily high amid a modest US Dollar pullback. The fundamental backdrop, however, warrants some caution before confirming that the pullback from an over two-week high, touched on Wednesday, has run its course and positioning for any meaningful upside.

Ethereum: Derivatives interest in ETH improves, but signs of caution remain

Ethereum is hovering slightly below the $1,900 level, down 3% on Thursday following a slight expansion in derivatives interest. The top altcoin's open interest has increased to 14.60 million ETH, marking a 600K ETH increase over the past two days and its highest level since June 7.

XRP retreats as ETF interest cools

Ripple (XRP) slides toward the short-term $1.10 support on Friday, as broader crypto market sentiment weighs on crypto assets. The sell-off mainly stems from fears of inflation in the United States (US) amid the ongoing war in the Middle East and rising Oil prices.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.