Pound Sterling slumps as soft UK CPI data boosts BoE dovish bets
- The Pound Sterling faces selling pressure against its major peers after the release of the UK CPI report for October.
- UK service inflation fell to 4.5% from 4.7% in September.
- Investors await the FOMC Minutes and US NFP data.
The Pound Sterling (GBP) declines sharply against its major currency peers on Wednesday, following the release of the United Kingdom (UK) Consumer Price Index (CPI) data for October.
The Office for National Statistics (ONS) has reported that the headline inflation has fallen to 3.6% year-on-year (YoY), as expected, from 3.8% in September. In the same period, the core CPI – which excludes volatile items such as food, energy, alcohol, and tobacco – has grown moderately by 3.4%, as expected, compared to the prior reading of 3.5%. On a month, the UK headline inflation rose expectedly by 0.4% after remaining flat in September.
Meanwhile, inflation in the services sector has also come down to 4.5% from 4.7% in September. Signs of price pressures cooling have paved the way for an interest rate cut by the Bank of England (BoE) at its monetary policy meeting in December. Following the UK CPI report, traders raised BoE easing bets for the December cut to 85% from 80% before the data release.
This month, BoE dovish expectations were already intensified after the release of the labour market data for the three months ending in September, which showed weakness in the job market.
On Tuesday, BoE policymaker Swati Dhingra stated at the University of Sheffield that she expects further disinflation in the services sector. She further argued that the central bank should push policy rates to the neutral level “fairly soon”, a state where interest rates neither restrict nor stimulate the economy.
Going forward, investors will focus on the UK Retail Sales data for October and the preliminary S&P Global Purchasing Managers' Index (PMI) data for November, which will be published on Friday.
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 US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.09% | 0.24% | 0.30% | 0.17% | 0.40% | 0.52% | 0.27% | |
| EUR | -0.09% | 0.15% | 0.20% | 0.08% | 0.31% | 0.45% | 0.18% | |
| GBP | -0.24% | -0.15% | 0.04% | -0.08% | 0.16% | 0.30% | 0.04% | |
| JPY | -0.30% | -0.20% | -0.04% | -0.12% | 0.11% | 0.24% | -0.02% | |
| CAD | -0.17% | -0.08% | 0.08% | 0.12% | 0.23% | 0.37% | 0.10% | |
| AUD | -0.40% | -0.31% | -0.16% | -0.11% | -0.23% | 0.15% | -0.14% | |
| NZD | -0.52% | -0.45% | -0.30% | -0.24% | -0.37% | -0.15% | -0.27% | |
| CHF | -0.27% | -0.18% | -0.04% | 0.02% | -0.10% | 0.14% | 0.27% |
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).
Daily digest market movers: Pound Sterling slumps against US Dollar
- The Pound Sterling declines to near 1.3100 against the US Dollar (USD) during Wednesday’s European session, following the release of the UK inflation data. The GBP/USD pair is down amid weakness in the British currency and a rising US Dollar.
- At the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, posts a fresh weekly high near 75.50. The US Dollar trades firmly ahead of the United States (US) Nonfarm Payrolls (NFP) data for September, which will be released on Thursday.
- Investors will closely monitor the US labour market data as it will significantly influence the US Dollar and market expectations for the Federal Reserve (Fed) monetary policy outlook.
- Economists expect US employers to have created 50K new jobs, higher than 22K in August. The Unemployment Rate is seen unchanged at 4.3%. Average Hourly Earnings, a key measure of wage growth, is expected to have grown steadily by 0.3% and 3.7% on a monthly and annual basis, respectively.
- Ahead of the US Nonfarm Payrolls (NFP) data, Fed officials have been expressing rising job market risks. On Monday, Fed Governor Christopher Waller said the US central bank should cut interest rates at the December meeting, citing a slowdown in the hiring trend.
- “I am hearing that firms are paying for AI investment by not hiring, and firms say low-and-middle income households are not spending, hitting hiring, which makes the case for continuing interest rate cuts,” Waller said.
- Currently, the CME FedWatch tool shows that the probability of the Fed cutting interest rates by 25 basis points (bps) to the 3.50%-3.75% range in the December meeting has diminished to 48.9% from 66.9% a week ago.
- In Wednesday's session, investors will focus on the Federal Open Market Committee (FOMC) Minutes for the October meeting, which will be published at 19:00 GMT. In the meeting, the Fed reduced interest rates by 25 bps to 3.75%-4.00%.
Technical Analysis: Pound Sterling stays below 200-day EMA
The Pound Sterling slides to near 1.3100 against the US Dollar on Wednesday. The overall trend of the GBP/USD pair remains bearish as it trades below the 200-day Exponential Moving Average (EMA), which is around 1.3264.
The 14-day Relative Strength Index (RSI) strives to hold above 40.00. A fresh bearish momentum would emerge if the RSI falls back below that level.
Looking down, the April low near 1.2700 will act as a key support zone. On the upside, the October 28 high around 1.3370 will act as a key barrier.
Economic Indicator
FOMC Minutes
FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.
Next release: Wed Nov 19, 2025 19:00
Frequency: Irregular
Consensus: -
Previous: -
Source: Federal Reserve
Minutes of the Federal Open Market Committee (FOMC) is usually published three weeks after the day of the policy decision. Investors look for clues regarding the policy outlook in this publication alongside the vote split. A bullish tone is likely to provide a boost to the greenback while a dovish stance is seen as USD-negative. It needs to be noted that the market reaction to FOMC Minutes could be delayed as news outlets don’t have access to the publication before the release, unlike the FOMC’s Policy Statement.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
