GBP/USD Price Forecast: At make or a break around 1.3500

GBP/USD trades lower to near 1.3470 as the British Pound faces selling pressure.
The BoE left interest rates unchanged at 3.75% on Thursday.
Market sentiment turns risk-on as oil prices fall significantly.

Sagar Dua FXStreet

The British Pound (GBP) underperforms its major currency peers, trading 0.1% lower at around 1.3470 against the US Dollar (USD) during the early European trading session on Monday. The GBP/USD declines as traders reconsider Bank of England (BoE) interest rate expectations, following the monetary policy announcement on Thursday.

Pound Sterling Price Today

The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the weakest against the Japanese Yen.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.09%	0.04%	-0.66%	0.07%	-0.15%	-0.11%	0.11%
EUR	0.09%		0.12%	-0.60%	0.16%	-0.07%	0.02%	0.16%
GBP	-0.04%	-0.12%		-0.67%	0.01%	-0.20%	-0.09%	0.06%
JPY	0.66%	0.60%	0.67%		0.66%	0.42%	0.53%	0.65%
CAD	-0.07%	-0.16%	-0.01%	-0.66%		-0.23%	-0.13%	-0.01%
AUD	0.15%	0.07%	0.20%	-0.42%	0.23%		0.09%	0.29%
NZD	0.11%	-0.02%	0.09%	-0.53%	0.13%	-0.09%		0.17%
CHF	-0.11%	-0.16%	-0.06%	-0.65%	0.01%	-0.29%	-0.17%

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).

Analysts at Deutsche Bank stressed that the BoE was not “edging towards a rate hike,” a message that prompted a swift reassessment in market pricing. They note that investors “dialed back expectations for BoE hikes,” with the implied probability of a September move dropping from 60% to 30%. In parallel, Deutsche Bank highlights that “31bps of hikes [were] priced by year-end (-11.4bps on the day),” underscoring how the latest policy signals have tempered the market’s conviction in further tightening this year.

Last week, the BoE left interest rates unchanged at 3.75%, with a 6-3 majority, and stated that interest rate hikes would be needed if Middle East risks persist and second-round effects of inflation start emerging.

However, BoE Governor Andrew Bailey signaled in the press conference that the current state of inflation is not as bad as it thought. "Encouraging that CPI is below where we thought it would be,” Bailey said.

Meanwhile, the market sentiment is favorable for riskier assets, as oil prices have declined significantly due to a renewed ceasefire between the United States (US) and Iran. As of writing, S&P 500 futures are up 0.6% to near 7,535, reflecting a risk-on mood.

GBP/USD technical analysis

GBP/USD trades lower at around 1.3475, but reflects a bullish near-term bias as it holds above the 20-period exponential moving average (EMA), which is at 1.3389. The pair is at a critical level of 1.3470 where it could extend the advance or face a bearish reversal.

The Relative Strength Index (RSI) at 59 keeps a positive bias without yet signaling overbought conditions on the daily chart.

On the downside, the 20-day EMA around 1.3389 should let sellers press the pair lower. Looking up, the psychological level of 1.3500 is the key hurdle for British Pound bulls; a decisive break above that would improve the odds of further upside towards the July high at 1.3558.

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

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.

AUD/USD sticks to positive bias above 0.7100; lacks bullish conviction

AUD/USD trades with a positive bias for the second straight day, holding above 0.7100 during the Asian session on Friday as softer US bond yields keep US Dollar bulls on the back foot. Furthermore, bets that the RBA will hike interest rates later this month support the Aussie. However, the Fed's hawkish outlook, along with geopolitical uncertainties, limits USD losses and caps the currency pair.

USD/JPY trades near two-week top, above 156.00 after Japan's CPI and ahead of BoJ

USD/JPY catches some bids during the Asian session after data released Friday showed Japan's core consumer inflation held near the BoJ’s 2% target in August. Spot prices trade above 156.00 as traders await the BoJ's expected interest rates hike to a 31-year high. Meanwhile, softer US bond yields undermine the US Dollar, capping the currency pair.

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Bank of Japan is set to raise interest rates as inflation, economic growth support tighter policy

The Bank of Japan’s monetary policy meeting will close a week packed with central bank decisions on Friday, with markets particularly interested in confirming expectations of a hawkish shift that has boosted a strong Japanese Yen recovery in September.

S&P Global to acquire OpenZeppelin in on-chain security expansion

S&P Global has agreed to acquire blockchain security firm OpenZeppelin as the financial data and analytics company expands its on-chain risk assessment capabilities. The acquisition, announced Thursday, will bring OpenZeppelin’s smart contract security services, development tools and open-source libraries into S&P Global’s existing digital asset and risk assessment business.

How Japan became the World's Banker and why that era may be ending

Japan's ultra-low interest rates helped finance trillions of dollars in global investments for more than a decade, making the Japanese Yen one of the world’s cheapest sources of funding. With the Bank of Japan expected to tighten policy again this week, that advantage may be entering a new phase. While most major economies raised interest rates, Japan remained the world's outlier.