Pound Sterling Price News and Forecast: GBP/USD prolongs its downtrend for the third straight day

FXStreet Team FXStreet

British Pound slides to fresh low since April vs bullish USD amid UK political crisis

The GBP/USD pair attracts some follow-through selling for the third straight day and weakens further below the 1.3200 mark, hitting a fresh low since April during the Asian session on Friday. Spot prices remain on track to register heavy weekly losses, and the fundamental backdrop suggests that the path of least resistance remains to the downside.

The British Pound (GBP) continues with its relative underperformance in the wake of lingering domestic political risks, which, along with a bullish US Dollar (USD), validates the near-term negative outlook for the GBP/USD pair. Greater Manchester Mayor Andy Burnham cleared a path to attempt to oust British Prime Minister Keir Starmer after winning a parliamentary seat in northern England on Friday. In his victory speech, Burnham said the result could be a "turning point" for British politics and told his party that this was a final chance to change direction. Read more...

British Pound Sterling slides as cheaper Crude Oil masks the inflation pipeline

The Bank of England (BoE) delivered the hawkish hold the market expected on Thursday, and a second member of its Monetary Policy Committee (MPC) joined the push to raise the Bank Rate. Sterling fell anyway, sliding through the 1.3300 handle to its lowest level since early April, close to 1.3200. On its face, the hawkishness looks stubborn against a ceasefire dragging Crude Oil toward pre-war lows and a UK headline inflation rate that flatly refused to rise.

That apparent contradiction dissolves the moment you stop watching the Oil headline. The price pressure the committee is leaning against sits in surging services inflation already on the board, and in the food and petrochemical costs the Strait of Hormuz closure has baked into the supply chain, neither of which a ceasefire reverses. Read more...

British Pound slips as BoE holds rates, Fed’s cautious stance supports Greenback

The GBP/USD pair trades near a two-month close to the 1.3210 level on Thursday as the Pound Sterling (GBP) struggles to gain traction after the Bank of England (BoE) left interest rates unchanged at 3.75%, while the US Dollar (USD) remains supported by the Federal Reserve’s (Fed) cautious policy message.

The BoE voted 7-2 to keep the Bank Rate steady, with most policymakers favoring patience amid uncertainty over the inflation outlook and recent volatility in energy prices. However, the split vote showed that inflation concerns remain, as two members supported raising the rate to 4.00%.

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