GBP/USD firm as soft CPI pressures Dollar, BoE stance supports Sterling
- GBP/USD rises as BoE cuts rates 25 bps in tight 5–4 vote with hawkish undertones.
- US CPI cools to 2.7% YoY, core slips to 2.6%, easing Dollar support.
- Jobless Claims beat forecasts, while markets keep 2026 Fed easing expectations broadly unchanged.
GBP/USD surges during Thursday’s North American session as following the release of a benign US inflation report and a “hawkish” rate cut by the Bank of England (BoE). The pair trades at 1.3410 up 0.28% after reaching a daily low of 1.3340.
Pound strengthens after UK rate cut surprises markets, cooler US inflation weighs on the Dollar
The US Consumer Price Index rose by 2.7% YoY in November, down from 3% in September, revealed the US Bureau of Labor Statistics (BLS). Underlying inflation dipped from the 3% threshold, down to 2.6%, revealed the data.
Although the print is positive, economists warned that the 43-day US government shutdown made it impossible for BLS workers to collect some of the data they usually compile for the report.
At the same time, Initial Jobless Claims for the week ending December 13 diminished from a downward revised figure from the last week to 237K, came at 224K below forecasts of 225K, revealed the Department of Labor.
Given the fundamental backdrop, expectations that the Federal Reserve would cut rates next year remained mostly unchanged, with money markets pricing in 62 basis points of easing for 2026.
Earlier, the BoE cut rates from 4% to 3.75% in a 5-4 vote split, which drove the GBP/USD higher. The minutes of the meeting revealed that Bailey shifted camps, turned dovish for the meeting, and added that the future trajectory on interest rates is uncertain.
The minutes added that inflation persistence data shows positive signs, but risks remain in both directions.
Goldman Sachs projects the BoE to cut 25 basis points in March, June and September of 2026.
Ahead the economic docket will feature US Personal Consumption Expenditures (PCE) Price Index and the University of Michigan Consumer Sentiment. In the UK, traders will eye Retail Sales for November which are expected to improve from 0.2% to 0.9% YoY.
GBP/USD Price Forecast: Technical outlook
The GBP/USD technical picture shows that buyers were unable to clear the previous week’s high at 1.3455, putting in question the Pound’s recovery. The Relative Strength Index (RSI) shows that bullish momentum is fading, which clears the path to test lower prices.
A daily close below 1.3400 will expose the 100-day Simple Moving Average (SMA) at 1.3361, ahead of the 200-day SMA at 1.3347. On further weakness, look for 1.3300.
Conversely, a rally past 1.3460, and the 1.3500 figure would be up for grabs.
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 Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.08% | -0.15% | -0.20% | -0.01% | 0.42% | 0.41% | -0.24% | |
| EUR | -0.08% | -0.22% | -0.29% | -0.10% | 0.37% | 0.33% | -0.31% | |
| GBP | 0.15% | 0.22% | 0.04% | 0.13% | 0.58% | 0.55% | -0.10% | |
| JPY | 0.20% | 0.29% | -0.04% | 0.18% | 0.63% | 0.59% | 0.18% | |
| CAD | 0.00% | 0.10% | -0.13% | -0.18% | 0.45% | 0.43% | -0.08% | |
| AUD | -0.42% | -0.37% | -0.58% | -0.63% | -0.45% | -0.04% | -0.67% | |
| NZD | -0.41% | -0.33% | -0.55% | -0.59% | -0.43% | 0.04% | -0.64% | |
| CHF | 0.24% | 0.31% | 0.10% | -0.18% | 0.08% | 0.67% | 0.64% |
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.
