GBP/USD Forecast and News
GBP/USD remains confined above 1.2700 ahead of UK CPI, FOMC Minutes
The GBP/USD pair remains confined around 1.2710 during the early Asian session on Wednesday. Financial markets await fresh impetus, with the release of the UK Consumer Price Index and FOMC Minutes due on Wednesday.
Latest Pound Sterling News
GBP/USD Technical Overview
GBP/USD trades within the upper half of the ascending regression channel coming from late April and the Relative Strength Index (RSI) indicator on the 4-hour chart stays near 70, suggesting that the pair could have a hard time gathering further bullish momentum before making a technical correction.
On the upside, 1.2760 (Fibonacci 78.6% retracement of the latest downtrend, upper limit of the ascending channel) aligns as key resistance before 1.2800 (psychological level, static level). Supports are located at 1.2700 (psychological level, static level), 1.2660 (Fibonacci 61.8% retracement of the latest downtrend, mid-point of the ascending channel) and 1.2600 (static level).
Fundamental Overview
GBP/USD holds steady slightly above 1.2700 early Tuesday after closing the first day of the week virtually unchanged. The technical outlook shows that the bullish bias stays intact but the pair's action could remain subdued ahead of key inflation data from the UK on Wednesday.
The lack of high-impact macroeconomic data releases allowed financial markets to remain quiet on Monday. Comments from Federal Reserve (Fed) officials helped the US Dollar find a foothold following the decline seen in the previous week and made it difficult for GBP/USD to stretch higher.
Later in the day, Bank of England (BoE) Governor Andrew Bailey will speak on the key role that central bank reserves play in delivering the core mandates at an event organized by the London School of Economics and Political Science.
During the American trading hours, Fed Governor Christopher Waller, NY Fed President John Williams and Boston Fed President Susan Collins and Cleveland Fed President Loretta Mester are scheduled to deliver speeches. Fed officials have been acknowledging the progress seen in inflation in April, while taking on a cautious tone with regards to policy easing. Hence, the impact of Fed commentary on the USD's valuation until Thursday's PMI data could remain short-lived.
On Wednesday, the UK's Office for National Statistics (ONS) will publish Consumer Price Index (CPI) data for April. Investors expect the annual CPI inflation to decline to 2.1% from 3.2% in March. A reading below the market expectation could revive expectations for a BoE rate cut in June and weigh on Pound Sterling.
SPECIAL WEEKLY GBP/USD FORECAST
Interested in weekly GBP/USD forecasts? Our experts make weekly updates forecasting the next possible moves of the Pound-Dollar pair. Here you can find the most recent forecast by our market experts:
GBP/USD: Upcoming UK inflation will put the rally to the test Premium
The British Pound (GBP) exhibited a bullish trend throughout the week and managed to advance to fresh five-week peaks around 1.2700 against the US Dollar (USD).
GBP/USD Big Picture
GBP/USD Bullish Themes
GBP/USD BEARISH Themes
Latest GBP Analysis
Editors' picks
EUR/USD flattens out near 1.0850 as data looms
EUR/USD stuck closely to familiar levels on a sedate Tuesday market session. Talking points from Fed officials dominated headlines, but provided little new information for investors to digest, keeping risk appetite suppressed and stapling bids close to opening prices.
GBP/USD remains confined above 1.2700 ahead of UK CPI, FOMC Minutes
The GBP/USD pair remains confined around 1.2710 during the early Asian session on Wednesday. Financial markets await fresh impetus, with the release of the UK Consumer Price Index and FOMC Minutes due on Wednesday.
USD/JPY continues winning spell on Fed’s hawkish interest rate outlook
USD/JPY exhibits strength above 156.00 as the Fed maintains a hawkish tone on the interest rate outlook. Fed Bostic prefers to wait with current interest rates to be confident over the progress in disinflation. Japan’s officials remain worried over weak Yen-induced inflation.
Gold retreats from peak high amid Fed wary stance
Gold price retraces during Tuesday’s North American session after hitting an all-time high of $2,450. Yet it retreated below the April 12 high of $2,431 as the Greenback recovers some ground. The XAU/USD trades around $2,418, after reaching a high of $2,433.
Oil eases further after string of technical rejections
Oil tests the support of its 2024 rally again on Tuesday. Markets disregard current events in the Middle East as there is no risk for output in the region. The US Dollar Index is looking for direction, caught in a tight range at the beginning of the week.
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GBP/USD YEARLY FORECAST
How could GBP/USD move this year? Our experts make a GBP/USD update forecasting the possible moves of the pound-dollar pair during the whole year. Don't miss our 2024 GBP/USD forecast!
2024 GBP/USD FORECAST
In the GBP/USD Price Forecast 2024, our analyst, Dhwani Mehta, notes there are plenty of unknowns and looming uncertainties that make it difficult to convincingly predict the course of the Pound Sterling against the US Dollar (USD) in the year ahead. On both sides of the Atlantic, increased odds of a recession, a dovish pivot in the monetary policies and general elections are foreseen as the key factors driving the GBP/USD price action next year, barring any unprecedented geopolitical risks. Read more details about the forecast.
GBP/USD witnessed a rollercoaster ride in 2023 but the Pound Sterling managed to preserve the recovery gains seen in the first half of the year to a 15-month high of 1.3142.
MOST INFLUENTIAL POLITICAL EVENTS IN 2024 FOR GBP/USD
BoE policymakers continue to push back against expectations of rate cuts next year. However, deteriorating economic performance prompted money markets to begin pricing in four 25 bps rate cuts starting from the summer, anticipating the key rate to be slashed from 5.25% to as low as 4.25% by the end of 2024. The first cut is expected as early as June, to 5.0%.
Even though the Bank of England largely shrugged off a 0.3% contraction in GDP for October, the prospect of a recession in the run-up to a 2024 national election remains high.
A general election is expected next year in the US and the UK, which could fuel intense volatility around the GBP/USD pair. Amidst looming inflation and growth concerns, the political developments on both sides of the Atlantic are likely to be closely followed.
Influential Institutions & People for the GBP/USD
The Pound VS Dollar can be seriously affected by news or the decisions taken by two main central banks:
The Bank of England (BoE)
The Bank of England is the central bank of the United Kingdom. Established in 1694 and privately owned in the beginning, the Bank was nationalised in 1946 so now is completely owned by the UK government. BOE's main reason to be is to maintain monetary and financial stability in the country. Some of its other tasks are producing secure bank notes, operating asset purchase facility and keeping the inflation low and stable. The bank is overseen by the Court, named used to reffer the board of directors, and is accountable to Parliament and the public.
BOE Official Website, on Twitter and Facebook
The Federal Reserve Bank (Fed)
On the other
FED Official Website, on Twitter and Facebook
Andrew Bailey
Andrew Bailey is Governor of the Bank of England since 16 March 2020. He was announced as the new Governor of the BoE on 20 December 2019. Bailey was born in Leicester in 1959 and graduated from Queens' College with a BA in History and a PhD from the Faculty of History, University of Cambridge in 1985. Before becoming the Governor of the BOE, Andrew worked at the Bank in a number of areas, most recently as Executive Director for Banking Services and Chief Cashier, as well as Head of the Bank's Special Resolution Unit (SRU). Previous roles include Governor's Private Secretary, and Head of the International Economic Analysis Division in Monetary Analysis.
Bailey on BOE'S Profile and Wikipedia
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed's Profile and Wikipedia
BOE NEWS & ANALYSIS
ECB NEWS & ANALYSIS
About GBP/USD
The GBP/USD (or Pound / Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. The pair is also called 'The Cable', referring to the first Transatlantic cable that was crossing the Atlantic Ocean in order to connect Great Britain with the United States of America. This term originated in the mid-19th century, which makes it one of the oldest currency pairs.
Pound Sterling - US Dollar represents two economies: British and American (from United States of America). The Cable is a closely watched and widely traded currency pair where the Pound is the base currency and the US Dollar is the counter currency. For that reason, all the macroeconomic data related to the US and the UK affects the price of this pair. One of the events which affected most the volatility of the pound vs. dollar was Brexit.
Related pairs
EUR/USD
The EUR/USD (or Euro Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The popularity of Euro Dollar is due to the fact that it gathers two main economies: the European and American (from United States of America) ones. This is a widely traded currency pair where the Euro is the base currency and the US Dollar is the counter currency. Since the EUR/USD pair consists of more than half of all the trading volume worldwide in the Forex Market, it is almost impossible for a gap to appear, let alone a consequent breakaway gap in the opposite direction.
Normally, the EUR/USD is very quiet during the Asian session because economic data that affects the fundamentals of those currencies is released in either the European or U.S. session. Once traders in Europe get to their desks a flurry of activity hits the tape as they start filling customer orders and jockey for positions. At noon activity slows down as traders step out for lunch and then picks back up again as the U.S. comes online.
USD/JPY
The USD/JPY (or US Dollar Japanese Yen) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: EUR/USD, GBP/USD, AUD/USD, USD/CHF, NZD/USD and USD/CAD. Japanese Yen has a low interest rate and is normally used in carry trades. This is the reason why is one of the most trades currencies worldwide. In the USD/JPY the US Dollar is the base currency and the Japanese Yen is the counter currency. The pair represents American (from United States of America) and Japanese economies.
Trading the USD/JPY currency pair is also known as trading the "ninja" or the "gopher", although this last name is more frequently used when referred to the GBP/JPY currency pair. The US Dollar Japanese Yen usually has a positive correlation with the following two pairs: USD/CHF and USD/CAD. The nature of this correlation is due to the fact that both currency pairs also use the US Dollar as the base currency, such as USD/JPY. The value of the pair tends to be affected when the two main central banks of each country, the Bank of Japan (BoJ) and the Federal Reserve Bank (Fed), face serious interest rate differential.