Pound Sterling Price News and Forecast: GBP/USD under heavy pressure as UK gilt selloff continues

FXStreet Team FXStreet

GBP/USD Forecast: Pound Sterling under heavy pressure as UK gilt selloff continues

After losing nearly 1% on Wednesday, GBP/USD extended its slide and touched its lowest level since November 2023 below 1.2250 in the early European session on Thursday. The pair remains deep in negative territory below 1.2300 despite recovering slightly in the last hour.

The broad-based US Dollar (USD) strength and a bout of selloff in British government bonds triggered a sharp decline in GBP/USD. The yield on the 10-year UK gilt climbed to its highest level in over 16 years and the yield on the 30-year reached its strongest level since 1998 early Thursday. Read more...

GBP/USD Price Forecast: Bears likely to target 1.2350 area; focus remains on FOMC Minutes

The GBP/USD pair attracted some sellers for the second successive day on Wednesday and moved away from a one-week high, around the 1.2575 area touched the previous day. The downtick is sponsored by the emergence of some follow-through US Dollar (USD) buying, which now seems to have reversed a major part of its weekly losses registered on Monday amid the Federal Reserve's (Fed) hawkish shift.

In fact, the US central bank projected only two quarter-point rate cuts in 2025 amid still elevated inflation in the world's largest economy. Furthermore, US President-elect Donald Trump's policies are expected to stoke further inflation and force the Fed to slow the pace of rate cuts this year. The outlook was reinforced by Tuesday's upbeat US macro data, which pointed to a still resilient US economy. The Institute for Supply Management reported that its Non-Manufacturing Purchasing Managers' Index (PMI) rose to 54.1 in December and the Prices Paid component rose to a nearly two-year high. Read more...

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