Pound Sterling trades stably ahead of UK data, BoE decision
- The Pound Sterling trades with caution at the start of the week ahead of key UK data and the BoE’s monetary policy decision.
- Investors expect the BoE to cut interest rates by 25 bps to 3.75% on Thursday.
- Before the BoE decision, UK unemployment and inflation data will be published.
The Pound Sterling (GBP) starts the Bank of England’s (BoE) monetary policy week on a cautious note against its major peers. However, the British currency braces for volatility and might face selling pressure this week amid a flurry of economic data releases and strong expectations that the Bank of England (BoE) is expected to cut interest rates by 25 basis points (bps) to 3.75%.
Analysts at Deutsche Bank expect the BoE to reduce interest rates by 25 bps, with a 5-4 vote split amid signs of easing inflationary pressures and a softer labor market. In October, the United Kingdom’s (UK) core Consumer Price Index (CPI) – which excludes volatile components of food, energy, alcohol, and tobacco – grew by 3.4% year-on-year, the lowest figure seen since March.
Ahead of the BoE’s policy announcement, the UK CPI data for November will be published on Wednesday, which is expected to show that core inflation remained at 3.4%.
On Tuesday, the UK labour market data for the three months ending October and the preliminary S&P Global Purchasing Managers’ Index (PMI) data for December are scheduled to be released. The employment data is expected to show that the jobless rate accelerated further and wage growth cooled.
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.02% | -0.14% | -0.54% | -0.01% | 0.05% | 0.29% | 0.00% | |
| EUR | 0.02% | -0.12% | -0.55% | 0.00% | 0.07% | 0.32% | 0.02% | |
| GBP | 0.14% | 0.12% | -0.41% | 0.13% | 0.19% | 0.43% | 0.14% | |
| JPY | 0.54% | 0.55% | 0.41% | 0.55% | 0.62% | 0.86% | 0.57% | |
| CAD | 0.01% | -0.01% | -0.13% | -0.55% | 0.06% | 0.31% | 0.02% | |
| AUD | -0.05% | -0.07% | -0.19% | -0.62% | -0.06% | 0.24% | -0.07% | |
| NZD | -0.29% | -0.32% | -0.43% | -0.86% | -0.31% | -0.24% | -0.29% | |
| CHF | -0.00% | -0.02% | -0.14% | -0.57% | -0.02% | 0.07% | 0.29% |
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).
Pound Sterling trades higher against US Dollar ahead of US NFP data
- The Pound Sterling rises to near 1.3385 against the US Dollar (USD) during the European trading session on Monday. The GBP/USD pair edges higher as the US Dollar trades lower ahead of the United States (US) Nonfarm Payrolls (NFP) data for October and for November, which is scheduled to be published on Tuesday.
- At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades lower to near its eight-week low of 98.13.
- Investors will closely monitor the US employment data as it will influence market expectations for the Federal Reserve’s (Fed) monetary policy outlook. The Fed has reduced its interest rates by 75 basis points (bps) in the last three monetary policy meetings, and comments from officials have signaled that the major driver behind rate cuts was weak labor market conditions.
- On Friday, San Francisco Fed Bank President Mary Daly said in a LinkedIn post that she favored interest rate cuts, adding that “inflation is too high and the job market is getting softer, but we cannot let the labor market falter", Reuters reported.
- On Tuesday, investors will also focus on US Retail Sales for October and flash S&P Global PMI data for December.
- Broadly, the Cable is upbeat as the US Dollar remains close to its eight-week low amid growing expectations that the Federal Reserve (Fed) will deliver more interest rate cuts in 2026 than officials signaled in the dot plot last week.
- According to the CME FedWatch tool, there is a 64.3% chance that the Fed will cut interest rates at least two times by the end of 2026. This market bets defy the last Fed’s dot plot, which showed that policymakers see the Federal Fund Rate falling to 3.4% by 2026, indicating just one more interest rate cut from current levels of 3.50%-3.75%.
Technical Analysis: GBP/USD strives to break above 1.3400
GBP/USD trades higher around 1.3385 as of writing. The 20-day Exponential Moving Average (EMA) at 1.3286 rises, and the pair holds above it, keeping the near-term bias pointed higher.
The 14-day Relative Strength Index (RSI) at 61 reflects positive momentum without overbought conditions.
Measured from the 1.3783 high to the 1.3008 low, the 38.2% retracement at 1.3304 has been cleared, underpinning the recovery tone. The 50% retracement at 1.3395 marks immediate resistance, and a break higher would extend the rebound towards the 61.8% Fibo retracement at 1.3488. Failure to top that barrier could see consolidation back toward the moving average.
The trend remains supported while price sustains above the ascending 20-day EMA, though a drop beneath 1.3286 would open the door for further downside towards the December low of 1.3180.
(The technical analysis of this story was written with the help of an AI tool)
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.
