Pound Sterling Price News and Forecast: GBP/USD struggles to register any recovery

FXStreet Team FXStreet

Pound Sterling struggles near four-week low vs. USD, below 1.3500 amid BoE rate cut bets

The GBP/USD pair is seen consolidating its weekly losses registered over the past three days and oscillating in a narrow range near a four-week trough, touched during the Asians session on Thursday. Spot prices currently trade just below the 1.3500 psychological mark and seem vulnerable to slide further.

The British Pound (GBP) continues with its relative underperformance on the back of rising bets that the Bank of England (BoE) will cut interest rates at its next policy meeting in March. The expectations were reaffirmed by the disappointing UK jobs report and a fall in the UK consumer inflation to its lowest level in nearly a year. This, along with a bullish US Dollar (USD), validates the near-term negative outlook for the GBP/USD pair. Read more...

GBP/USD extends decline as weak jobs data bolsters BoE rate cut bets

The Pound Sterling (GBP) continued to backslide under sustained pressure on Wednesday, following through after the UK employment report on Tuesday showed a labour market deteriorating faster than expected. The Bank of England's (BoE) preferred measure of regular private sector wage growth dropped to a five-year low of 3.4%, removing a key obstacle that has kept the more hawkish Monetary Policy Committee (MPC) members from backing rate cuts.

Markets now fully expect a 25-basis-point reduction by April, with a 76% probability of a March move. Wednesday's UK Consumer Price Index (CPI) did little to ease the burden on Bank of England (BoE) policymakers, especially after Producer Price Index (PPI) inflation and Retail Price Index figures all missed expectations. Read more...

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FXStreet Team

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Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

AUD/USD bounces off multi-month low, nears 0.6900

AUD/USD edges higher toward 0.6900 in the Asian session on Wednesday, recovering some of the previous day’s losses to its lowest level since March as the US Dollar stalls the hot US CPI-inspired rally amid hopes of a US-Iran peace deal. Meanwhile, hawkish comments from FOMC members have almost confirmed another December rate hike, which favors USD bulls and should cap the Aussie.

USD/JPY remains capped below 159.00 amid looming intervention risks

USD/JPY struggles to build on the previous day’s strong gains to a near one-month top as intervention risk supports the Japanese Yen while hopes of a US-Iran peace deal cap the safe-haven US Dollar. That keeps the pair's upside limited below 159.00, for now.

Gold extends gains beyond $4,050; upside seems capped as Fed hike bets support USD

Gold climbs further beyond $4,050 heading into the European session on Wednesday, reversing a part of the previous day's heavy losses, though the upside seems limited. Tuesday's hot US inflation figures fuel expectations of a more aggressive policy tightening by the US Federal Reserve (Fed). This helps the US Dollar (USD) preserve Tuesday's strong gains, despite hopes for US-Iran diplomacy, and might keep a lid on any meaningful appreciation for the non-yielding bullion.

Bitcoin at risk of sharp moves as leverage builds in derivatives markets

Bitcoin remains in a capped tone, trading around $73,800 after slipping to a low of $72,727 following the previous day’s hot US inflation figures. Institutional demand continues to weaken, with BTC spot Exchange Traded Funds recording a $95 million outflow on Tuesday, marking the fourth straight day of withdrawals. Traders should be cautious as a K33 Research report highlights that BTC is at risk of sharp moves as leverage builds in derivatives markets.

Hot CPI helps cement December Fed hike as Nvidia slumps

October CPI inflation landed yesterday and beat expectations across the board. Note that we only received the MM figures because of last year’s government shutdown. Headline MM came in at 0.4%, beating the 0.3% forecast, though below September's 0.6%. Core MM also came in at 0.3%, slightly higher than the 0.2% estimate and matching the prior month’s reading.

What the US CPI headline doesn’t tell you about inflation

Brent crude has fallen about a third since mid-October on hopes the Iran war is ending, but diesel, freight and fertiliser costs haven't followed. Those costs reach US consumer prices in stages through 2027 and could keep inflation high after gasoline gets cheaper.