GBP/USD se drží kolem 1,35, zatímco trh čeká na páteční americká data z trhu práce, která rozhodnou o dalším směru dolaru. Slabé payrolls by mohly měnový pár vrátit k 1,3650.
The Pound to Dollar (GBP/USD) exchange rate traded around 1.3547 on Monday after last week's Dollar rebound knocked Sterling back from six-month highs.
Friday's US employment report should determine whether that correction extends.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.355175 (+0.13%)
Euro to Dollar (EUR/USD): 1.161853 (+0.31%)
Dollar to Yen (USD/JPY): 159.75691 (-0.22%)
WEEKLY RECAP:
GBP/USD climbed above 1.3640 early last week before coming under sustained pressure, ending Friday at 1.3534.
The Dollar strengthened after Federal Reserve Chair Kevin Warsh used his Jackson Hole speech to underline continued concern over underlying inflation.
Markets subsequently raised the probability of a September rate increase, while Barclays switched its forecast to two further Fed hikes this year.
MUFG economists described Warsh's message as hawkish, but added: “Overall, the speech was hawkish, but this is not new for Warsh.”
There remains disagreement over whether the Fed will actually deliver.
ING's Francesco Pesole said: “we remain reasonably confident in our call for the Fed to hold on 16 September and, by extension, in a weaker dollar.”
The Dollar edged lower again on Monday as traders looked towards this week's data.
Sterling has its own policy uncertainty.
BoE hike expectations softened last week, but recovering UK-US yield spreads have helped limit Pound selling.
Scotiabank noted that the recovery was “offering fundamental support” to Sterling, while its strategists continue to see the broader Dollar trend as lower.
Near-Term GBP/USD Forecast: US Payrolls Hold the Key Tuesday brings UK manufacturing PMI and mortgage approvals, while US ISM manufacturing and JOLTS vacancies should provide the first important Dollar tests.
Wednesday's ADP employment report is followed on Thursday by UK services PMI, US jobless claims and ISM services.
Friday combines UK construction PMI and a speech from BoE Governor Andrew Bailey with the crucial US payroll report.
Non-farm employment is forecast to increase by 55,000, unemployment to remain at 4.1% and hourly earnings to rise 0.3%.
Weak payrolls could return GBP/USD towards 1.3650.
Stronger hiring and hawkish Bailey caution would expose 1.3450.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The Pound-Dollar rate has fallen back to 1.3534 after Jackson Hole, but UBS still sees Sterling at 1.40 by December and 1.41 through much of 2027. The Pound to Dollar (GBP/USD) exchange rate ended Friday at 1.3534, down 0.46% after Kevin Warsh revived expectations for another Federal Reserve rate increase.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.3534 (-0.46%)
Euro to Dollar (EUR/USD): 1.158209 (-0.61%)
Dollar to Yen (USD/JPY): 160.10118 (+0.50%)
That leaves Cable well below its August high at 1.3675, but UBS has made no retreat from its bullish medium-term Sterling path.
Its updated forecast table reads: “GBP/USD: 1.40 Dec 2026, 1.41 Mar 2027, 1.41 Jun 2027, 1.41 Sep 2027.”
The rationale was set out more fully by UBS strategists Constantin Bolz and Dominic Schnider earlier this month.
“UK politics have shifted from a headwind to a potential tailwind,” they said, while “[Pound] Sterling remains relatively under-owned.”
That under-ownership matters if investors return after Friday's Dollar-driven correction.
UBS has also argued that “long-dollar positioning remains vulnerable to a reversal”, creating scope for “existing long-dollar positions [to] be unwound” if Fed expectations soften again.
Friday went the other way.
Warsh pushed the implied probability of a September Fed hike from around 35% before his speech to 57.5%, while Sterling suffered its first weekly decline against the Dollar in more than a month.
We previously examined UBS's increasingly positive Sterling view before the Jackson Hole reversal.
The forecast now has a cleaner test: holding around 1.35 would leave the 1.40 year-end scenario plausible, while renewed Fed tightening pressure would make the first hurdle, around 1.38, considerably harder to clear.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
GBP/USD testoval rezistenci 1,3650/60; Scotiabank vidí po jejím proražení prostor k 1,41 po zbytek roku. V průběhu dne pár vystoupal na 1,3675 a poté se vrátil k 1,3645.
Scotiabank’s conditional GBP/USD objective sits above consensus after Pound Sterling tests the 1.3650/60 resistance area The Pound to US Dollar (GBP/USD) exchange rate has tested the mid-1.36s, putting Scotiabank’s conditional route towards 1.41 into focus.
ERUK market data show GBP/USD reached an intraday high near 1.3675 before slipping back towards 1.3645, so the sustained push required by Scotiabank has not yet occurred.
The bank’s scenario depends on a durable advance beyond the 1.3650/60 area, which has contained Sterling near its early-May peak.
It is a notably bullish technical case: ERUK’s Research Currency Forecast Sentiment Survey places the median fourth-quarter forecast at 1.3446 and the top of the surveyed range at 1.40.
Scotiabank analysts noted the recent move reflected broad US Dollar weakness more than a sudden improvement in UK fundamentals.
Nevertheless, the bank judged the technical structure to be firmly positive after GBP/USD twice defended the 1.3150 area during April and June.
The strategists said “a sustained push above 1.3650/60 implies potential for an extension towards the 1.41 zone over the balance of the year”.
That makes 1.41 a possible extension rather than a guaranteed year-end destination, with Sterling still needing to establish former resistance as support.
1.3848 as the intermediate test Sucden Financial analysts highlighted 1.3650/60 as the breakout zone and said the next broader objective was 1.3848.
Sucden described the set-up as one “with the January high around 1.3848 representing a broader upside target”.
The level therefore offers an intermediate test of whether Scotiabank’s larger scenario is gaining traction.
The two institutions reach a similar bullish conclusion but on different horizons.
Sucden’s 1.3848 is the first substantial obstacle above the trigger, while Scotiabank’s conditional 1.41 objective extends through the balance of 2026.
Sucden placed initial support near 1.3600 and a deeper cushion around 1.3500, where the 20-day average and 30-day volume-weighted average price reinforce the technical floor.
A daily close below 1.3600 would weaken the breakout case and expose 1.3500, while a sustained hold above 1.3650/60 would strengthen the route towards 1.3848 and 1.41.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
GBP/USD vyskočil intradenně na 1,3675 po nečekaně silném britském PMI služeb. Data ukázala nejrychlejší růst za šest měsíců a zmírnila tlak na brzké uvolnění politiky BoE.
Pound Sterling jumped to $1.3675 after UK services activity unexpectedly accelerated, adding to signs that the economy is holding up better than feared. The Pound to Dollar (GBP/USD) exchange rate surged to an intraday high of 1.3675 on Friday after a much stronger-than-expected UK services survey delivered a fresh positive surprise for Sterling.
The S&P Global flash PMI survey showed the UK Services PMI rising to 52.8 in August from 52.1 in July, its strongest reading for six months and well above the 51.8 consensus in a Reuters poll.
The composite PMI also strengthened to 52.5 from 52.2, compared with expectations for 51.6, while manufacturing eased to 51.5 from 51.9.
GBP/USD later eased back to around 1.3656 by late morning, still 0.09% higher on the day and 0.91% stronger over the previous five sessions.
Pound Sterling reaction around the 09:30 BST UK Services PMI release, showing GBP/USD and GBP/EUR. Services Surprise Strengthens the UK Resilience Story S&P Global said the survey was consistent with UK GDP growth of around 0.3% in the third quarter, with services benefiting from better domestic conditions, favourable weather and technology investment.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said: “The expansion is being helped by sunny weather and tech investment”.
There were still reasons for the Bank of England to remain cautious. Employment continued to fall and price pressures picked up again as higher energy costs fed into business expenses.
The combination leaves the BoE facing stronger activity alongside persistent inflation risks, reducing the urgency for any near-term policy easing.
For GBP/USD, the fresh 1.3675 high is now the immediate resistance point. A sustained break above that area would put the 1.3700 level in focus, while a retreat below 1.3600 would suggest the post-PMI momentum is beginning to fade.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
GBP/USD se dostal na nejlepší úrovně od poloviny února díky slabšímu dolaru a lepšímu než očekávanému indexu průmyslových trendů objednávek CBI. Trh ale čeká britské maloobchodní tržby a PMI.
Pound-Dollar can hold above $1.36 if pressure on the US Dollar from fiscal concerns and softer Fed bets offsets any drag from weaker UK retail sales and PMI data. The Pound US Dollar (GBP/USD) exchange rate maintained a positive trajectory on Thursday, with the pairing being propelled to its best levels since mid-February.
At the time of writing, GBP/USD was trading at around $1.3646. Up around 0.3% from Thursday’s opening levels.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.362643 (+0.20%)
Euro to Dollar (EUR/USD): 1.167162 (-0.02%)
Dollar to Yen (USD/JPY): 159.0647 (+0.51%)
DAILY RECAP:
The US Dollar (USD) remained under pressure on Thursday, slipping to fresh multi-month lows as concerns over the US fiscal outlook continued to weigh on sentiment towards the ‘Greenback’.
The latest warning sign came as America’s national debt surpassed the $40tn mark for the first time, reinforcing concerns over the sustainability of the country’s finances and the growing cost of servicing its debt.
The milestone came alongside ongoing volatility in the US bond market, where long-term borrowing costs had climbed sharply, forcing the US Treasury to step in and announce it would at least double the size of its planned buybacks of longer-dated government debt.
The Pound (GBP) traded with modest support on Thursday, firming on the back of the Confederation of British Industry's (CBI) latest industrial trends orders index.
The index printed at -25 this month, marking a continued contraction in order books, but a marked improvement from the -45 recorded in July and striking its best levels since late 2024.
The data points to surprising resilience in the UK manufacturing sector, despite headwinds posed by the war in the Middle East and rising energy prices.
Near-Term GBP/USD Forecast: UK retail sales and PMIs could test Sterling strength Turning to Friday's session, the Pound to US Dollar (GBP/USD) exchange rate may be pressured by the final UK economic releases of the week.
Friday's European session opens with the release of the UK's latest retail sales data, which is forecast to report a contraction in consumer spending and sap Sterling sentiment.
The subsequent publication of the UK's latest PMIs could then drag the Pound even lower, as economists forecast that growth in the UK's dominant services sector is likely to have slowed this month.
Closing out the session will be the publication of the latest US S&P PMIs. While not as influential as the ISM indexes, they could still lend the US Dollar support if they point to further resilience in the US private sector.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
GBP/USD surged to 1.3613 on Wednesday, reaching a three-month high. Investors are digesting fresh UK inflation and labour market data.
Consumer inflation accelerated to 2.9% in July, up from 2.6% in June and in line with forecasts. Core inflation held steady at 2.6%. Following the release, markets slightly scaled back expectations of a Bank of England rate hike before year-end.
Earlier labour market data showed unemployment holding at 4.9%, above expectations, while the number of payrolled employees fell by 86,000 year-on-year. Meanwhile, growth in regular pay remained fairly stable at 3.5%.
Additional support for the pound is coming from a weaker dollar. Soft US economic data have led investors to reduce expectations of further Federal Reserve tightening. At the same time, elevated oil prices and uncertainty surrounding the US–Iran conflict continue to pose inflation risks for the UK.
Technical analysis
On the H4 GBP/USD chart, a wide consolidation range is forming around the 1.3523 level. The market has moved towards its upper boundary. A new compact consolidation range is expected to form below 1.3631. A downside breakout from this range would open the way for a move lower towards 1.3500. The MACD supports this scenario, with its signal line above zero and beginning to turn downwards.
On the H1 chart, the market has formed a compact consolidation range around the 1.3607 level, currently extending between 1.3588 and 1.3618. A move lower towards 1.3572 is expected, followed by a move higher to 1.3600. The Stochastic oscillator confirms this scenario, with its signal line below 80 and trending downward towards 20, indicating short-term downside pressure.
ConclusionGBP/USD has climbed to a three-month high, supported by a weaker dollar and UK economic data that largely met expectations. Inflation accelerated to 2.9% in July, while core inflation held steady, prompting markets to slightly lower BoE rate hike expectations. Labour market data showed unemployment above forecasts and a decline in payroll employment, though wage growth remained stable. The dollar remains under pressure from soft US data, which has reduced Fed tightening expectations. However, elevated oil prices and geopolitical uncertainty continue to pose inflation risks for the UK. Technically, the pair may see a short-term pullback towards 1.3572, with potential for a further decline to 1.3500. The near-term direction will depend on upcoming economic releases and central bank signals.
The Pound to Dollar (GBP/USD) exchange rate jumped above 1.3600 on Wednesday, reaching its strongest level since May as falling Treasury yields hit the US Dollar.
Pound Sterling's own UK inflation backdrop was broadly neutral.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.360955 (+0.55%)
Euro to Dollar (EUR/USD): 1.167557 (+0.86%)
Dollar to Yen (USD/JPY): 158.12827 (-0.89%)
DAILY RECAP:
GBP/USD climbed around 0.5% as the Dollar sold off sharply across the major currencies.
The decisive move came after the US Treasury announced it would double buybacks of longer-dated government bonds, sending 10 and 30-year yields lower and easing financial conditions.
Deutsche Bank strategist George Saravelos warned that failure by the Federal Reserve to recognise that effect would amount to “an additional dollar negative driver.”
The subsequent FOMC minutes were more hawkish.
Several policymakers had been prepared to raise rates in July, while many judged that another increase would be needed if inflation failed to return towards target.
Markets largely looked through that message following softer jobs, inflation and retail sales data released since the meeting.
ING's Chris Turner said: “Our base case is that it does not, and the dollar softens a little,” referring to the prospect of a September Fed hike.
Scotiabank remains similarly cautious on the US currency, stating: “We remain bearish on the outlook for the USD in the short/medium term.”
Pound Sterling had earlier shown little reaction to UK inflation.
Headline CPI rose as expected to 2.9%, while services inflation eased to 3.4% and producer input prices dropped 1.7%.
Those figures, combined with Tuesday's softer labour data, leave the Bank of England with little urgency to raise rates again.
Near-Term GBP/USD Forecast: 1.3650 in Focus After Dollar Sell-Off Thursday brings US jobless claims, forecast at 210,000, alongside the Philadelphia Fed manufacturing index.
Friday is busier for Sterling. UK retail sales are forecast to fall 0.5%, before manufacturing and services PMIs at 09:30 BST.
US flash PMIs follow at 14:45 BST.
Strong UK activity alongside softer US figures could push GBP/USD through 1.3650 and expose 1.3700.
Weak UK retail sales combined with resilient US data would put 1.3500 back in view.
The broader Pound to Dollar exchange rate (GBP/USD) remains constructive while the pair holds above the low-1.35 area.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
GBP/USD se drží poblíž srpnových maxim, protože vyšší výnosové spready a slabší zajištění proti poklesu podporují libru. Scotiabank vidí další test na 1,3600.
Pound Sterling is pressing August highs as firmer yield spreads and fading bearish hedges support Scotiabank's bullish GBP/USD view. The Pound to Dollar (GBP/USD) exchange rate is pushing back towards its August highs, trading around 1.3545 early on Monday after reaching 1.3560 last week.
Scotiabank sees a stronger underlying backdrop for Sterling than the relatively modest price move suggests.
“The pound is up 0.3% vs. the USD and threatening a break of this week’s local high in the mid-1.35s,” the bank said.
Yield spreads are helping. Scotiabank notes that UK-US spreads have extended their recent recovery, offering fresh fundamental support for GBP at the same time as demand for protection against Sterling weakness has eased.
The options market is telling a similar story.
“Risk reversals are extending their recovery and fading the premium for protection against GBP weakness,” Scotiabank said, linking the move to “a sustained improvement in the market’s perception of moderating political risk.”
That gives the latest advance a broader base than simple Dollar weakness.
Image: GBP/USD one-month chart GBP/USD has recovered strongly from its late-July low below 1.33, with the pair now trading above its rising 20-day moving average and close to the top of its one-month range.
Bank of England communication has also remained supportive.
Scotiabank highlighted comments from BoE Chief Economist Huw Pill which “reaffirmed a call for higher rates”, helping to keep Sterling's rate backdrop constructive despite a relatively quiet UK data calendar.
Short-Term GBP/USD Outlook: 1.3600 Is the Next Test Scotiabank's technical view has turned firmly bullish.
“The RSI has climbed to a fresh local high in the lower 60s, threatening the July high,” the bank said. “The gains are suggestive of renewed bullish momentum and a potential break of the midweek high just below 1.3550.”
That level has effectively already come under pressure, with GBP/USD reaching 1.3560 during the latest advance.
Scotiabank sees additional resistance at 1.3600 and then 1.3650, while retaining a near-term trading range of 1.3480-1.3580.
Image: Pound-to-Dollar exchange rate performance over 2016 GBP/USD remains well below its January high near 1.3860, but the latest recovery has carried spot above both its 20-day and 50-day moving averages and back into positive territory for 2026.
The immediate question is whether Sterling can convert improving positioning and yield support into a clean move through the mid-1.35s.
Scotiabank's signals suggest the pressure is building.
A sustained break above 1.3550 would bring 1.3600 quickly into view, while 1.3480 marks the lower edge of the bank's preferred near-term range.
For Pound Sterling bulls, the balance has shifted from defending 1.35 to testing how far above it the market can go.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The British Pound (GBP) trades 0.35% higher to near 1.3533 against the US Dollar (USD) during the European trading session on Friday. The GBP/USD pair reflects strength as the US Dollar declines, with traders pricing out the possibility of an interest rate hike by the Federal Reserve (Fed) in the September policy meeting.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.23% lower to near 99.70.
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD-0.34%-0.39%-0.24%-0.35%-0.31%-0.65%-0.27%EUR0.34%-0.05%0.07%-0.06%0.03%-0.32%0.06%GBP0.39%0.05%0.15%0.00%0.08%-0.25%0.12%JPY0.24%-0.07%-0.15%-0.11%-0.08%-0.43%-0.03%CAD0.35%0.06%-0.00%0.11%0.04%-0.29%0.08%AUD0.31%-0.03%-0.08%0.08%-0.04%-0.34%0.05%NZD0.65%0.32%0.25%0.43%0.29%0.34%0.39%CHF0.27%-0.06%-0.12%0.03%-0.08%-0.05%-0.39%
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
The CME FedWatch tool shows that the odds of the Fed holding policy rates steady in September have increased to almost 65%. This represents a major repricing from the 75% odds of two Fed hikes by the September meeting recorded a month earlier.
Soft United States (US) Consumer Price Index (CPI) data for July allowed traders to pare back hawkish Fed interest rate expectations.
US inflation data temper September Fed hike oddsAnalysts at Commerzbank note that "July US CPI came in broadly in line with expectations," reinforcing the view that price pressures, while still elevated, are not re-accelerating. They highlight that "overall, the report suggested that underlying inflation remains above the Fed's target but showed no broad-based re-acceleration, giving policymakers more room to remain on hold." In response, Commerzbank points out that "the Fed funds futures subsequently pared expectations for a September rate hike, with markets pricing around a 40% probability of a 25bp increase compared with 52% on Monday," underscoring a modest but notable shift in near-term Fed tightening expectations.
Meanwhile, the British Pound is expected to trade highly volatile next week as the United Kingdom (UK) labor market data for three months ending June and the CPI data for July are scheduled to be released on Tuesday and Wednesday, respectively.
GBP/USD Technical Analysis
In the daily chart, GBP/USD trades at 1.3535, having pushed decisively above the former downward resistance trend line, which now offers support around 1.3451. Price action above this reclaimed structural level suggests a bullish near-term bias, while the Relative Strength Index (14) at 62.7 shows firm positive momentum without yet reaching overbought territory, hinting that buyers retain control.
On the downside, the broken trend-line region near 1.3451 is immediate support, and a daily close back below that level would signal waning bullish pressure. On the topside, the next notable hurdle is the origin of the previous trend line around 1.3871, where a sustained break would open the way for a broader continuation of sterling gains against the dollar.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022.
Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates.
When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
GBP/USD zůstává v krátkodobém rostoucím trendu nad 1,3479 po průrazu nad střednědobou klesající trendovou linií. Klíčové bude dnešní americké CPI; vyšší inflace by mohla pár stlačit k 1,3400.
Key takeaways Sterling stays firm: GBP/USD remains in a short-term uptrend above 1.3479 after breaking above its medium-term descending trendline post-NFP.US CPI is the key catalyst: A hotter-than-expected core CPI could revive Fed-hike bets and pressure GBP/USD, while softer inflation may extend sterling’s rally.1.3479 is pivotal support: Holding above it keeps 1.3547, 1.3580 and 1.3643 in focus; a break below exposes 1.3440 and 1.3400. The sterling pound has been one of the best-performing major currencies against the US dollar in the past five trading sessions.
The USD/GBP cross rate has tumbled by 0.38% (a 0.38% gain for GBP against USD) at the time of writing, slightly above USD/CAD, which recorded a 0.56% loss over the same period (see Fig. 1).
Fig. 1: 5-day rolling performances of USD against major currencies as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
Fig. 1: 5-day rolling performances of USD against major currencies as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance. Macro divers: inflation trajectory versus Fed pricing Market sentiment remains closely tied to incoming inflation data as investors gauge whether the Federal Reserve will resume rate hikes later this year. Following recent mixed labour market signals, pricing for the September FOMC decision sits close to a coin toss (based on latest data from the CME FedWatch tool, the Fed funds futures market is only pricing in a 48.1% chance of a 25-bps hike, down from around 70% chance a week ago).
Hot CPI scenario (Core YoY > 2.5%): A surprise to the upside, driven by core goods price pass-throughs, would likely trigger a hawkish repricing in US short-term Treasury yields. This would provide a strong tailwind for the US Dollar Index, exposing GBP/USD to a rapid downward repricing toward the 1.3400 psychological level (also near the 20- and 200-day moving averages).Soft CPI scenario (Core YoY ≤ 2.5%): Confirmation of easing services inflation and softer shelter costs would give the Fed breathing room. A softer dollar would reinforce risk appetite, pushing GBP/USD above near-term hurdles toward multi-month highs.Let’s now decipher the near-term (1 to 3 days) outlook on the GBP/USD from a technical analysis perspective
Oscillating within minor ascending channel after a bullish breakout ex-post NFB
Fig. 2: GBP/USD minor trend as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
Fig. 2: GBP/USD minor trend as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance. The price action of GBP/USD has cleared a significant medium-term hurdle after staging a bullish breakout ex-post the US NFP release (a major risk event on Friday, 7 August 2026), above its former descending trendline resistance from the 28 January 2026 high/52-week high.
In addition, it continues to oscillate within a minor ascending channel in place since the 29 July 2026 low of 1.3279, with a current bullish momentum reading on the hourly RSI (see Fig. 2).
These observations suggest that GBP/USD is oscillating within a short- to medium-term uptrend.
Watch the 1.3479 key short-term pivotal support to maintain a near-term bullish bias for the next intermediate resistances to come in at 1.3547, 1.3580 and 1.3643 (also a Fibonacci extension).
On the flip side, a failure to hold and an hourly close below 1.3479 invalidates the minor bullish impulsive up-move sequence, triggering a minor corrective decline towards the next intermediate supports at 1.3440 and 1.3400.
Based in Singapore, Kelvin Wong is a well-established senior global macro strategist with over 15 years of experience trading and providing market research on foreign exchange, stock markets, and commodities.
Passionate about connecting the dots in the financial markets and sharing perspectives around trading and investment, Kelvin Wong is an expert in using a unique combination of fundamental and technical analyses, specializing in Elliott Wave and fund flow positioning, to pinpoint key reversal levels in the financial markets.
In addition, over the last ten years, Kelvin has conducted numerous market outlook and trading-related seminars, as well as technical analysis training courses, for thousands of retail traders.
Based in Singapore, Kelvin Wong is a well-established senior global macro strategist with over 15 years of experience trading and providing market research on foreign exchange, stock markets, and commodities.
Passionate about connecting the dots in the financial markets and sharing perspectives around trading and investment, Kelvin Wong is an expert in using a unique combination of fundamental and technical analyses, specializing in Elliott Wave and fund flow positioning, to pinpoint key reversal levels in the financial markets.
In addition, over the last ten years, Kelvin has conducted numerous market outlook and trading-related seminars, as well as technical analysis training courses, for thousands of retail traders.
GBP/USD se drží poblíž 1,3500, nejvýše od 15. července, protože slabý americký trh práce oslabil dolar. Další směr určí čtvrteční britský předběžný odhad HDP za 2. čtvrtletí a středeční inflace v USA. Očekává se, že britská ekonomika vzroste o 0,2 % mezikvartálně, meziročně o 1,6 % a červnový HDP přidá 0,1 %.
GBP/USD enters the week of 10–14 August near 1.3500 – its highest level since 15 July. Sterling is building on the momentum from a sharp decline in the dollar following a weak US labour market report, which reduced expectations of a Federal Reserve rate hike in September. Further support has come from the drop in oil prices: cheaper energy is easing inflation risks and reducing pressure on the UK economy.
Geopolitics remains a key factor. Donald Trump announced progress in negotiations between Iran and Oman regarding the Strait of Hormuz, although no final agreement has yet been reached. A further decline in oil prices would reinforce expectations that the Bank of England can maintain a gradual approach to monetary policy. At its last meeting, the regulator left rates unchanged, and Andrew Bailey confirmed that the disinflation process continues.
The main event for sterling this week will be Thursday’s preliminary GDP estimate for the second quarter. The economy is expected to grow by 0.2% quarter-on-quarter, down from 0.6% previously, with the annual rate projected at 1.6% versus 0.9%. June GDP is forecast to rise by 0.1%. Stronger-than-expected data would support GBP/USD, while a marked slowdown could put renewed pressure on the pound.
On the US side, the key release will be July inflation data on Wednesday, with core CPI expected at 2.5% year-on-year and headline CPI at 3.4%. Thursday brings PPI, followed by retail sales and the University of Michigan’s preliminary consumer sentiment index on Friday. Weak inflation and consumer figures could weigh heavily on the dollar and support further GBP/USD gains, while sustained price pressures would strengthen the case for Fed tightening.
Technical Analysis
On the H4 GBP/USD chart, a wide consolidation range is forming around the 1.3470 level. An upside breakout would open the way for a move towards 1.3522 and then 1.3535. A downside breakout would suggest a move towards 1.3436, and a break below this level would open the way for the trend to extend to 1.3190. The MACD indicator supports this scenario, with its signal line above zero and pointing downwards.
On the H1 chart, the market has formed a compact consolidation range around the 1.3470 level, currently extending between 1.3434 and 1.3500. A move lower towards 1.3470 is expected, followed by a move higher to 1.3535. The Stochastic oscillator confirms this scenario, with its signal line below 50 and pointing downwards. In the short term, a decline towards 20 is expected, followed by a rise towards 80.
Conclusion GBP/USD has started the week on a strong footing, trading near its highest level since mid-July. The pound has benefited from a weaker dollar following soft US labour market data and falling oil prices, which have eased inflation concerns and reduced expectations of aggressive Fed tightening. Geopolitical progress regarding the Strait of Hormuz has also supported risk sentiment. Markets will now focus on UK GDP data on Thursday and US inflation figures on Wednesday, both of which will provide important clues about the policy outlook for the BoE and Fed. Technically, the pair appears poised for further upside towards 1.3535, with near-term direction hinging on this week’s key data releases. A break below 1.3436 would shift the outlook to bearish, exposing the 1.3190 level.
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GBP/USD minulý týden vzrostl asi o 1 % na 15denní maximum, protože slabší americká data oslabila dolar. Další směr určí páteční zpráva o zaměstnanosti v USA.
Pound-Dollar could extend its recovery if US labour market data weakens further, although stronger ISM surveys may help steady the Greenback. The Pound to US Dollar (GBP/USD) exchange rate climbed to a 15-day high last week as investors scaled back Federal Reserve rate hike expectations following softer US economic data and the latest central bank decisions.
At the time of writing, GBP/USD was trading around $1.3483, up approximately 1% over the week.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.347555 (-0.05%)
Euro to Dollar (EUR/USD): 1.153631 (+0.06%)
Dollar to Yen (USD/JPY): 156.42647 (-0.65%)
Image: GBP/USD monthly returns WEEKLY RECAP:
The US Dollar (USD) opened the week on a firm footing as a cautious market mood boosted demand for the safe-haven currency.
Trading remained subdued until Wednesday evening, when the Federal Reserve left interest rates unchanged by a 9-3 vote and adopted a broadly neutral tone.
Following the decision, markets pared back expectations for further Fed interest rate hikes this year, triggering broad-based US Dollar weakness.
Selling pressure intensified on Thursday after second-quarter US GDP growth slowed to 1.5%, missing expectations and decelerating from 2.1% in the first quarter.
At the same time, the latest core PCE price index suggested inflation cooled modestly in June, adding to expectations that the Fed may be in no hurry to tighten policy further.
An improving market mood also kept the safe-haven US Dollar under pressure into the end of the week.
Meanwhile, the Pound (GBP) traded without clear direction during the first half of the week ahead of the Bank of England's policy decision.
The BoE announcement provided modest support for Sterling, although gains were uneven as investors assessed the voting split and Governor Andrew Bailey's comments.
Policymaker Catherine Mann joined two colleagues in voting for an interest rate increase after previously supporting unchanged policy, while Bailey reiterated there was little evidence that inflation was becoming entrenched in the UK economy.
After a soft start on Friday, Sterling recovered after Chancellor John Healey confirmed the date of the Autumn Budget and reiterated the government's commitment to maintaining its fiscal rules, helping reassure investors.
Image: Pound-to-Dollar exchange rate forecast consensus range as of August 2026 Share article
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Near-Term GBP/USD Forecast: Non-Farm Payrolls Report in Focus Looking ahead, the US ISM manufacturing and services PMIs on Monday and Wednesday are expected to provide the first major clues on the health of the US economy.
If both surveys point to improving business activity, the US Dollar could regain some support.
However, the week's key release will be Friday's US non-farm payrolls report.
A stronger-than-expected increase in employment could revive support for the Greenback, although any further rise in the unemployment rate may offset the positive impact.
Meanwhile, the UK's final services PMI on Wednesday is the main domestic release for Sterling. Confirmation that the UK's dominant services sector returned to growth in July could provide additional support for the Pound.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
MUFG uvádí, že jestřábí postoj Bank of England podporuje GBP/USD, ale Baileyho odmítnutí brzkého zvýšení sazeb omezuje další růst. Pár zakončil červenec kolem 1,3482 po zisku 1,75 % za měsíc.
MUFG says the Bank of England’s hawkish hold should keep Sterling supported, but Governor Bailey’s pushback against imminent rate increases limits the scope for a sustained GBP/USD rally. The Pound to Dollar exchange rate (GBP/USD) ended July around 1.3482 after gaining 1.75% over the month and rebounding strongly from lows below 1.33.
GBP/USD rose around 0.85% over the final 48 hours of July, reaching a high near 1.3495 and finishing close to the top of that range.
Image: Pound to Dollar (GBP?USD) exchange rate chart - final 48hr pre-close Over the past three months, the pair has traded between approximately 1.3142 and 1.3658, leaving the latest rate near the middle of its broader spring and summer range.
MUFG believes the Bank of England’s latest communication remains supportive for Sterling, although policymakers stopped short of signalling an imminent rate increase.
The Monetary Policy Committee left rates unchanged, with MUFG’s textual analysis describing the written contributions as consistent with a hawkish hold. Policymakers continued to emphasise inflation persistence, second-round effects and the risks posed by energy prices and geopolitical uncertainty.
The committee remains divided. MUFG’s framework placed Catherine Mann firmly in hawkish territory, followed by Huw Pill and Megan Greene, while Swati Dhingra and Alan Taylor remained on the dovish wing.
Mann’s shift was particularly notable, with her comments placing greater weight on inflation risks arising from Middle East tensions and volatile energy prices.
The press conference delivered a more balanced signal than the written statement, however.
MUFG scored the MPC contributions at 23.3 on its hawk-dove scale, compared with a softer 17.0 for Governor Andrew Bailey’s press conference.
Bailey explicitly warned markets not to leave the meeting believing that the MPC was “edging towards a hike”.
That distinction is important for Pound Sterling.
The BoE remains concerned enough about inflation to resist a dovish shift, supporting UK yields and the Pound, but it is not yet preparing investors for another tightening move.
According to MUFG, “the communication remains supportive, but the deliberate pushback against rate hike expectations limits the scope for upside.”
Image: GBP/USD 3-month history The Pound-Dollar exchange rate charts reinforce that mixed picture.
GBP/USD has recovered above both its short-term moving averages, but remains below the May high near 1.3658.
A clean move through 1.3500 would improve the immediate technical tone, while the 1.3550-1.3660 area is likely to offer stronger resistance.
Pound Sterling’s rebound can therefore extend while the Dollar remains under pressure, but MUFG’s assessment suggests the BoE alone is unlikely to drive GBP/USD decisively beyond its recent highs.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
UK economists expect the GBP/USD exchange rate to retreat in the near-term outlook as steady BoE rates and doubts over the durability of hawkish policy guidance weigh on Pound Sterling. The Pound to Dollar exchange rate (GBP/USD) traded around 1.3443 on Friday morning after gaining more than 1.3% over the previous two sessions.
GBP/USD closed Thursday at 1.3461, leaving the pair 1.6% higher for July but still below the month’s 1.3558 peak.
Rabobank expects that recovery to fade, forecasting Cable in a 1.32–1.33 range over the next one to three months.
The bank’s argument is that markets have already tightened UK monetary conditions on the Bank of England’s behalf by pricing further rate increases and pushing borrowing costs higher.
“In RaboResearch’s view, the heavy lifting done by the market may help the Bank avoid an actual hike in policy rates,” Rabobank said.
Thursday’s BoE decision reinforced that possibility. Bank Rate remained at 3.75%, despite three policymakers voting for an immediate increase.
The vote looked hawkish, but the majority still preferred to wait for clearer evidence that higher energy costs were feeding into wages and domestic prices.
Rabobank believes markets will initially continue “taking the BoE’s hawkish rhetoric at face value and maintain its expectations of rate hikes”.
The risk is that investors eventually demand action.
The bank questioned whether another unchanged decision could cause markets to doubt whether the Monetary Policy Committee is “truly focused on its inflation mandate”, particularly if policymakers continue talking tough without raising rates.
Image: GBP/USD median bank forecast path showing a near-term fall towards 1.33 before a longer-term recovery The latest Exchange Rates UK forecast survey poll, see chart above, broadly supports Rabobank’s near-term caution. The median bank projection falls to around 1.33 by the end of the third quarter before recovering gradually through 2027 and moving above 1.40 in late 2028.
Rabobank is less convinced about the Pound’s medium-term prospects.
“Further out we see risk that UK fiscal concerns will combine with steady BoE rates to weigh on the pound,” the bank said.
The UK labour market remains central to that view. Before the energy shock, weaker employment conditions had supported expectations that the BoE would cut rates this year.
Recent signs of stabilisation have complicated the picture and may increase the risk of “second order price effects” as oil prices rise again.
Rabobank said stronger labour data or “another ramp higher in UK CPI inflation data” could increase pressure on the Bank “to put its money where its mouth is”.
Near-Term GBP/USD Forecast: Rabobank Targets 1.32–1.33 as BoE Credibility Faces a Test Rabobank’s range implies that Thursday’s move above 1.34 will not be sustained.
A decline to 1.33 would reverse much of the latest rally, while 1.32 would return Cable towards the lower part of its recent trading range.
The Dollar side is also important. Sterling benefited when short-term US yields and the greenback fell after the Federal Reserve held rates steady, but Rabobank does not view that as enough to secure a lasting Pound advance.
Its central judgement is that the BoE may continue using hawkish language while avoiding an actual increase.
That strategy can support Sterling only while markets believe a hike remains credible. Rabobank’s 1.32–1.33 forecast suggests that confidence will become harder to maintain.
The pound sterling has started to show relevant strength against the U.S. dollar. At the moment, GBP/USD has gained slightly more than 1.3% in the short term, reflecting an important buying bias.
Buying pressure began to gain relevance after the Federal Reserve decision during yesterday’s session and strengthened even further after the Bank of England decision today. For now, the central bank dynamic could continue to be key for demand in the pound sterling and maintain possible buying pressure on GBP/USD over the next few trading sessions.
Fed and BoE signals shape the outlook During today’s session, the Bank of England published its interest rate decision and kept the reference rate at 3.75%, in line with expectations. However, the vote delivered an important signal: 6 members voted to keep rates unchanged, while 3 members voted for a 0.25% hike.
Although the rate did not change, this division was interpreted as a slightly more aggressive signal, as it shows that an important part of the committee is starting to consider the need for further increases over the coming months.
In the statement after the decision, the central bank highlighted that energy prices remain volatile and that this factor could continue to pressure inflation. For this reason, although additional hikes were not confirmed, the BoE does not appear ready to ease its stance either. If annual inflation fails to move closer to the 2.00% target, the central bank could continue to consider a more restrictive monetary policy.
The dynamic in the United States was slightly different. Although the Federal Reserve also kept rates unchanged in the 3.50% - 3.75% range, Kevin Warsh’s comments after the decision did not offer a clear signal of a possible hike in September.
This difference is important because the market expected a more aggressive stance from the Fed, but the event did not confirm that expectation. According to the CME Group probability table, for the September 16 decision, there is still a probability near 61% of a rate hike in the United States. However, a probability of almost 40% that rates remain unchanged has also started to emerge, something that had not been observed with the same strength in previous weeks.
Source: CMEGROUP
As a result, the market is facing an interesting dynamic. In the United States, expectations of a more aggressive Fed have lost strength, while in the United Kingdom, the BoE showed internal division that keeps open the possibility of a more restrictive stance if inflation remains a problem.
This contrast has started to be reflected in the U.S. dollar. The DXY index, which measures the dollar’s strength against its main peers, has shown a relevant decline since the Federal Reserve announcement and is now below the 100-point area. This suggests that demand for the dollar has started to weaken significantly after the U.S. central bank decision.
Source: TradingEconomics
With this in mind, and considering that both the United States and the United Kingdom maintain rates near 3.75%, the main difference lies in each central bank’s message. While the market is starting to price in a Bank of England that appears more willing to act if necessary, the Federal Reserve has reduced signals of early rate increases.
This dynamic could continue to weigh on the dollar and open room for the pound sterling to recover more consistently. If this scenario remains in place, GBP/USD could continue to show buying pressure over the next few trading sessions.
Technical forecast for GBP/USD
Source: StoneX, Tradingview
The broad sideways range continues to dominate: Despite GBP/USD’s recovery attempts, the chart continues to show a broad sideways channel that has acted as the main technical structure for several months. This range remains between an upper area near 1.37492 and support around 1.32079. If price fails to break consistently out of these levels, the sideways structure will remain the most relevant pattern and could continue to reflect indecision over the coming trading weeks.
RSI: Now, the RSI remains above the neutral 50 level, suggesting that bullish impulses have started to gain relevance in the short term. If this dynamic continues, the indicator could keep supporting the formation of a more important buying bias over the next few sessions.
MACD: The MACD shows a histogram near the neutral 0 area, suggesting balance in the strength of short-term moving averages. This reading indicates that, although the pound has gained strength, the indecision bias has not completely disappeared from the GBP/USD chart.
Key levels:
1.36255 – Relevant resistance: This relevant high is positioned as the main bullish barrier in the short term. Price movements toward this area could reinforce the current buying pressure and open room for a more consistent bullish bias over the next few sessions. In addition, a clear break above this level could start to put at risk the broad sideways range that has remained in place for several months.
1.34079 – Near-term barrier: This recent neutral area coincides with the 50- and 200-period simple moving averages. If price moves back toward this level consistently, it could once again highlight a phase of indecision and keep the sideways range as the dominant technical structure.
1.32079 – Crucial support: This low coincides with the lower barrier of the broad sideways range. Sustained moves below this point could reflect a dominant selling bias and open room for the formation of a short-term bearish trend line over the coming trading weeks.
Written by Julian Pineda, CFA, CMT – Market Analyst
The Pound-Dollar rate could remain under pressure unless the Bank of England delivers a sufficiently hawkish message after an inconclusive Federal Reserve decision. The Pound to US Dollar (GBP/USD) exchange rate weakened on Thursday morning as markets turned their attention to the Bank of England following a divided Federal Reserve policy decision.
GBP/USD retreated towards $1.3345 during early European trading, extending its recovery from Wednesday’s pre-Fed lows but remaining under pressure from renewed safe-haven demand for the US Dollar.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.333627 (-0.23%)
Euro to Dollar (EUR/USD): 1.144507 (-0.19%)
Dollar to Yen (USD/JPY): 163.59918 (+0.17%)
Federal Reserve Holds Rates but Offers Little Guidance The Federal Reserve left interest rates unchanged at 3.50%–3.75% on Wednesday, in line with the majority of economists’ forecasts.
The decision was nevertheless more divided than expected, with three policymakers voting for an immediate 25-basis-point rate increase because of persistent inflation risks.
Fed Chair Kevin Warsh reaffirmed the central bank’s commitment to returning inflation to its 2% target but provided few firm clues over the timing of any future policy move.
Warsh indicated that further tightening could be required if inflation pressures remained elevated, although he resisted offering the explicit forward guidance markets had become accustomed to under previous Fed leadership.
The initial market response was mixed. Short-term Treasury yields declined as investors reduced expectations of a September rate rise, while long-term yields climbed sharply amid concerns that the Fed was not acting decisively enough to contain inflation.
The Dollar initially weakened following the announcement but recovered during Asian trading as renewed US attacks on Iranian targets increased demand for defensive assets.
Pound Sterling Awaits Bank of England Guidance Attention now turns to Thursday’s Bank of England interest-rate announcement.
The Monetary Policy Committee is widely expected to leave Bank Rate unchanged at 3.75%, placing the focus on the vote split, updated economic forecasts and Governor Andrew Bailey’s comments.
UK inflation fell to 2.6% in June, but policymakers continue to face uncertainty over the impact of elevated oil and gas prices on household costs and inflation expectations.
Markets have priced a meaningful risk of higher UK interest rates during the coming year, although economists remain divided over whether the Bank will ultimately need to tighten policy.
A hawkish vote split or a warning that renewed energy-price pressures could make inflation more persistent would offer the Pound support.
Sterling could struggle, however, if the Bank emphasises weak domestic growth, slowing private-sector wages or the risk that tighter financial conditions will weigh on the economy.
Near-Term GBP/USD Forecast: BoE Tone to Determine Next Move The near-term Pound-Dollar outlook is likely to depend heavily on whether the Bank of England validates or pushes back against expectations for future rate increases.
A hawkish BoE announcement could allow GBP/USD to recover towards the $1.3400–$1.3430 area.
A move above this zone would ease immediate downside pressure and potentially bring $1.3480 back into view.
Conversely, a cautious policy statement or a less hawkish vote than markets expect could drive the Pound back towards $1.3300.
A sustained break below $1.3300 would expose the recent lows around $1.3220.
The Dollar will also remain sensitive to developments in the Middle East, with any further escalation likely to increase safe-haven demand and maintain upward pressure on global energy prices.
Later in the week, the latest US GDP figures could also influence the pair. Stronger-than-expected second-quarter growth would reinforce expectations that the US economy can withstand elevated interest rates and could provide additional support for the Dollar.
GBP/USD se drží poblíž 1,3325, i když britská data byla silnější, než se čekalo. Scotiabank ale upozorňuje, že libra dál naráží na politickou a fiskální nejistotu.
The Pound to Dollar exchange rate held near 1.3325 on Friday, having retreated more than two cents from July’s high around 1.3558.
GBP/USD is still around 0.6% higher this month, but Sterling has struggled to respond to a stronger run of UK economic data.
Over the past year, the pair has traded between approximately 1.3010 and 1.3858.
Scotiabank noted that June retail sales were far stronger than expected, while the preliminary July business surveys also surprised positively.
The manufacturing PMI rose to 52.8, signalling a solid expansion, while the services index recovered from contraction territory to 51.8.
Despite the upbeat figures, the bank said “market participants are clearly not responding to fundamentals”, with political uncertainty and concerns over the UK’s fiscal position continuing to weigh on the Pound.
Attention now turns to next Thursday’s Bank of England meeting. Rates are expected to remain unchanged, but Scotiabank anticipates a hawkish hold alongside updated economic forecasts.
Markets currently price around 16 basis points of tightening by September and 32 basis points by November.
Pound Sterling could gain if policymakers strengthen the case for a rate rise at the following meeting.
The options market is sending a more cautious signal, however, with demand increasing for protection against renewed GBP weakness.
Scotiabank linked the shift to geopolitical risks and domestic political concerns, both of which have pushed gilt yields higher.
The bank’s technical outlook remains neutral.
GBP/USD has slipped below the support previously expected near 1.3350, leaving 1.3300 as the immediate level to watch.
Stronger support is located at 1.3150, with resistance around 1.3550.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Rabobank expects renewed pressure on Pound exchange rates as concerns over Prime Minister Andy Burnham’s spending plans unsettle the gilt market. The British Pound concluded this trading week facing a difficult combination of political uncertainty, elevated UK bond yields and doubts over how the new government intends to fund its policy agenda.
UK economists at Rabobank say the initial market response to Burnham’s cabinet and early policy announcements has been notably cautious.
Latest — Exchange Rates:
Pound to Euro (GBP/EUR): 1.171822 (+0.14%)
Pound to Dollar (GBP/USD): 1.332498 (+0.09%)
Euro to Dollar (EUR/USD): 1.137117 (-0.05%)
The UK 10-year gilt yield has moved above 5.0%, while Pound Sterling has ranked as the weakest G10 currency over the latest one-day period.
Although the appointment of an experienced Chancellor has offered some reassurance, the bank warns that uncertainty surrounding the government’s fiscal strategy could keep both gilts and the Pound under pressure.
Rabobank analysts expect EUR/GBP to rise to 0.8650 over the next three months and sees scope for GBP/USD to fall back towards 1.3200.
At current rates, those forecasts imply a weaker Pound against both the Euro and the US Dollar.
Rabobank Warns Burnham’s Honeymoon Could Be Brief Rabobank says the appointment of Healey as Chancellor is a stabilising factor because the country’s finances have been placed in the hands of an experienced politician with previous Treasury exposure and respect across Parliament.
However, the larger question is how Burnham plans to finance his agenda.
The Prime Minister has said he intends to use “flexibility” within the fiscal rules, which Rabobank says could point towards placing some infrastructure-related debt on the balance sheets of public financial institutions.
Although such borrowing might sit outside the most closely watched fiscal measures, it would still need to be absorbed by the bond market.
“The market will be wary about whether this constitutes ‘back door’ funding,” Rabobank says.
The government’s first cost-of-living measure is a reduction in VAT on household electricity bills from October.
Officials have indicated that the measure will be funded by cancelling the previous government’s digital identity programme, although reports have raised doubts over whether that scheme was fully funded in the first place.
Rabobank notes that use of greater flexibility within the fiscal rules could potentially mobilise an additional £16 billion for infrastructure projects over the remainder of the decade.
Infrastructure investment could improve productivity in parts of the UK outside London and the South East, but those benefits may take years to materialise.
Burnam, by contrast, faces a general election in less than three years.
That leaves the government under pressure to deliver visible improvements quickly, increasing the risk that spending commitments expand before the economic benefits become apparent.
“The market is now bracing itself for a list of further announcements,” Rabobank says.
“This suggests that funding issues will remain at the fore of the market’s mind and hints that Burnham’s honeymoon may be short-lived.”
Gilt Market Particularly Sensitive The latest UK borrowing figures were slightly better than expected for June, but borrowing over the first three months of the fiscal year remains above projections from the Office for Budget Responsibility.
At an early stage of the financial year, that overshoot might ordinarily attract limited attention.
Rabobank argues that the political backdrop makes investors more sensitive than usual.
Burnham is associated with the softer left of the Labour Party and has said he wants government to become less reliant on what he described as the “imperial” Treasury.
Against this backdrop, the bond market is likely to demand clear reassurance that new spending plans will remain compatible with the fiscal rules.
Rabobank also highlights structural vulnerabilities in the UK economy.
The country has a low household savings ratio and a substantial current-account deficit, increasing its dependence on overseas capital.
These characteristics can amplify market reactions when confidence deteriorates.
“The UK may not have the largest debt-to-GDP ratio in the developed world, but arguably it has one of the most sensitive debt markets,” Rabobank says.
Lower BoE Expectations Are Another Pound Risk The reduction in VAT on household electricity bills should mechanically lower inflation.
Rabobank also expects headline UK CPI inflation to ease to 2.7% year on year, offering some short-term reassurance to the gilt market.
The inflation outlook remains complicated by higher spot energy prices following the escalation in the US-Iran conflict, but Rabobank believes current Bank of England pricing is too aggressive.
Markets are pricing approximately 43 basis points of BoE tightening over the next six months.
Rabobank expects the central bank to avoid raising rates this year.
“On our view, this is overdone and a reduction in market expectations for BoE policy tightening is another headwind for the pound,” the bank says.
This is important because elevated UK interest-rate expectations have provided Sterling with some protection against fiscal and political concerns.
Were investors to remove those expected rate increases, the Pound would lose part of its yield advantage at the same time as the gilt market remains uneasy about government borrowing.
Image: Exchange Rates UK Research polling shows GBP/USD median bank forecast chart showing the live rate near 1.3325, a Q3 median near 1.32 and the longer-term forecast path GBP/USD Forecast: 1.3200 Comes Back Into View GBP/USD ended the latest session around 1.3325, recording a modest daily gain after Thursday’s 0.47% decline.
The pair has nevertheless fallen by more than two cents from the 15 July close near 1.3540 and remains well below July’s high of 1.3558.
The short-term chart shows Sterling attempting to stabilise around 1.3320 after repeated failures to sustain advances above 1.3340.
GBP/USD is trading close to the 20-period moving average at 1.3327 and session VWAP near 1.3323.
That positioning suggests the pair is currently balanced around its immediate fair-value area rather than developing a strong recovery.
The 200-period moving average near 1.3340 remains the more important overhead barrier.
A recent rebound failed close to that level, confirming the 1.3340-1.3350 region as the first substantial resistance zone.
RSI has recovered to approximately 48 from below 40, showing that downside momentum has eased.
However, the indicator remains below 50 and does not yet signal that buyers have regained control.
Initial support is located around 1.3310, followed by 1.3290.
Rabobank’s 1.3200 objective would come into clearer view following a break below these levels, while July’s low at 1.3221 represents a significant intermediate support area.
On the upside, a sustained move above 1.3340 would reduce immediate downside pressure, although GBP/USD would still need to recover through 1.3400 to suggest the broader July correction has ended.
Image: GBP/USD 15-minute chart with 1.3310 support, 1.3340 resistance and Rabobank’s 1.3200 forecast marked The median bank forecast path also points to near-term weakness before a later recovery.
The Q3 2026 median projection is close to 1.3200, broadly matching Rabobank’s three-month forecast, while the consensus path then rises towards 1.35 in early 2027 and approximately 1.38 by the end of that year.
Rabobank’s view is therefore consistent with the wider consensus in anticipating near-term pressure, although it does not rule out a longer-term recovery.
Image: EUR/GBP survey poll forecasts July 2026 EUR/GBP Forecast: Rabobank Targets 0.8650 EUR/GBP closed around 0.8534 after falling 0.14% in the latest session.
The cross has recovered from July’s low near 0.8455, but remains almost 1% lower for the month and below the July opening level near 0.8614.
The 15-minute chart shows that EUR/GBP has surrendered part of its recent rebound after failing above 0.8550.
The cross is trading close to its 20-period moving average near 0.8533, but remains below session VWAP around 0.8541 and beneath the 200-period moving average near 0.8539.
This leaves the immediate technical picture mixed.
The latest recovery from below 0.8530 shows that selling pressure has moderated, while RSI near 46 has moved above its signal line.
However, the cross remains below the neutral 50 level and has yet to overcome the main intraday resistance cluster.
Initial resistance is located around 0.8539-0.8542, followed by 0.8547 and the recent highs around 0.8550-0.8555.
A break through that area would strengthen the case for a return towards 0.8600.
Rabobank’s 0.8650 forecast lies above the current technical range and would require a more decisive deterioration in Sterling sentiment.
On the downside, support is located around 0.8530, followed by 0.8525.
A break below these levels would weaken the immediate recovery and raise the risk of a renewed move towards 0.8500.
Image: EUR/GBP 15-minute chart with 0.8530 support, 0.8550 resistance The wider bank consensus also leans towards a higher EUR/GBP rate over the coming quarters.
The median forecast stands close to 0.8700 from the third quarter of 2026 through early 2028, before easing towards 0.8600 and then 0.8450 by the end of 2028.
Rabobank’s 0.8650 target is therefore slightly below the near-term consensus median but still implies a meaningful Sterling decline from current levels.
Pound Sterling: Rabobank’s forecasts leave GBP exposed on two fronts Against the Euro, the bank expects EUR/GBP to rise towards 0.8650 as investors question the government’s fiscal plans and reassess the likelihood of Bank of England tightening.
Against the Dollar, it sees GBP/USD falling towards 1.3200 as political uncertainty, gilt-market sensitivity and lower UK rate expectations weigh on the Pound.
The technical charts show that neither move has yet been fully confirmed.
GBP/USD is attempting to stabilise around 1.3320, while EUR/GBP remains below resistance around 0.8550.
However, the fundamental risks identified by Rabobank remain unresolved.
A reduction in expected BoE tightening would remove an important source of Sterling support, while further spending announcements without a convincing funding plan could renew pressure on gilts.
The base case is therefore for Pound Sterling to remain vulnerable, with a GBP/USD break below 1.3290 strengthening the path towards 1.3200 and an EUR/GBP move above 0.8550 opening the way towards Rabobank’s 0.8650 target.
The British Pound (GBP) consolidates losses against the US Dollar (USD) on Wednesday, as a string of UK inflation figures provided some leeway for the Bank of England to maintain its “wait-and-see” stance through the coming months. The GBP/USD pair remains pinned near weekly lows, below 1.3400 following a nearly 1.2% decline in the last four days.
Data released by the UK National Statistics Office on Wednesday revealed that the Consumer Price Index (CPI) moderated to a 2.6% year-over-year (Y-o-Y) growth in June, from 2.8% in May, below the 2.7% forecasted by market analysts. The Core CPI, however, remained steady at 2.6% against expectations of a 2.5% reading.
Beyond that, the Input Producer Price Index (PPI) contracted 2% on the month, its sharpest decline in more than six years, while the Output PPI remained flat, undershooting expectations of a 0.4% advance. Year on year, input PPI eased to 7.3% from 9.3% while the Output PPI slowed down to 3.5% in June from 3.7% in May.
In the US, the calendar has been thin this week, but the US Dollar maintains a bid tone, buoyed by market concerns about the war in the Middle East and higher US Treasury yields. The US military pounded targets in Iran for the 11th consecutive day on Wednesday, and US President Donald Trump threatened to attack nuclear facilities, which, according to Tehran, would expand the war in the region.
UK Pound slides amid PM Burnham’s early fiscal signalsRabobank’s FX team notes that “UK markets have now had a few hours to react to PM Burnham’s new cabinet, many of whom have been involved in UK politics for years,” and the initial response has been cautious. They highlight that “10-year gilt yields are currently above the 5% level, which is a sign of some anxiety,” while “the Pound is the worst performing G10 currency on a 1-day view,” underscoring investor unease around the new administration’s fiscal direction.
In the near term, Rabobank points out that “Burnham has promised measures to ease cost-of-living pressures,” with the policy push already underway. “He kicked this off this morning with the news that VAT on household electricity bills will be cut from October,” the bank observes, adding that “the market is now bracing itself for a list of further announcements” as investors assess how these initiatives will be funded and what they might mean for UK assets.
Economic Indicator Consumer Price Index (YoY) The United Kingdom (UK) Consumer Price Index (CPI), released by the Office for National Statistics on a monthly basis, is a measure of consumer price inflation – the rate at which the prices of goods and services bought by households rise or fall – produced to international standards. It is the inflation measure used in the government’s target. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
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The Bank of England is tasked with keeping inflation, as measured by the headline Consumer Price Index (CPI) at around 2%, giving the monthly release its importance. An increase in inflation implies a quicker and sooner increase of interest rates or the reduction of bond-buying by the BOE, which means squeezing the supply of pounds. Conversely, a drop in the pace of price rises indicates looser monetary policy. A higher-than-expected result tends to be GBP bullish.
Economic Indicator Consumer Price Index (MoM) The United Kingdom (UK) Consumer Price Index (CPI), released by the Office for National Statistics on a monthly basis, is a measure of consumer price inflation – the rate at which the prices of goods and services bought by households rise or fall – produced to international standards. It is also the inflation measure used in the government’s target. The MoM figure compares the prices of goods in the reference month to the previous month. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
Britská inflace CPI za červen má podle odhadů zpomalit na 2,7 % meziročně, stále však zůstane nad cílem BoE. GBP/USD mezitím naráží na rezistenci v pásmu 1,3550–1,3560.
The UK Office for National Statistics (ONS) will release the June Consumer Price Index (CPI) figures on Wednesday at 06:00 GMT, a print that will matter for markets. Consensus expectations point to inflation pressures still above the Bank of England’s (BoE) target, although losing further momentum.
UK consumer inflation remains one of the most important inputs for the BoE and typically carries real weight for the British Pound (GBP). Following the latest cautious hold by the BoE on June 18, investors now favour a steady hand by the ‘Old Lady’ at its meeting on July 30.
What to expect from the next UK inflation report?Headline UK CPI is expected to clock 2.7% in the year to June, a tad lower than the May reading. On a monthly basis, inflation is seen gaining 0.1%, adding to the 0.2% increase recorded the previous month.
Core inflation, which strips out the more volatile food and energy components and is therefore more closely watched by the BoE, is forecast at 2.5% on an annual basis, down a tenth of percent from May.
How will the UK CPI data affect GBP/USD?The BoE met expectations and kept the bank rate unchanged at 3.75% on June 18. However, the 7–2 vote split carried a slightly more hawkish tone, with Megan Greene joining Huw Pill in supporting a 25-basis-point increase. But the larger message is patience, with policy still firmly in wait-and-see mode and market pricing that reflects that stance.
In his latest comments last week, Governor Andrew Bailey said the renewed hostilities in the Gulf highlighted the instability facing the global economy. Turning to the UK, he argued that the country was supported by both its fiscal framework and monetary policy, while stressing that the central challenge remained economic growth.
Bailey added that the UK’s core banking system was resilient and that debt levels were not overstretched. However, he warned that sustainable economic growth would not be possible without financial stability.
Implied rates currently suggest nearly 43 basis points of tightening by year-end, while consensus sees the central bank keeping its policy rate unchanged at its next gathering on July 30.
Back to technicals, Senior Analyst at FXStreet, Pablo Piovano, notes that the recent multi-week recovery in GBP/USD appears to have encountered some initial hurdle in the 1.3550-1.3560 band near the July tops. “In case bulls regain the upper hand, the next barrier emerges at the May top at 1.3653 (May 11), followed by the YTD ceiling at 1.3868 (January 27)," he adds.
On the downside, Piovano sees initial contention at current yearly lows near 1.3140 (June 24). “Further weakness from here could expose a move toward the November 2025 base at 1.3010 (November 5),” Piovano adds.
Piovano also points out that momentum indicators remain somewhat bullish for now as the Relative Strength Index (RSI) hovers just below 54, while the Average Directional Index (ADX) near 18 suggests the current trend lacks muscle.
Interest rates FAQs Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation.
Higher interest rates generally help strengthen a country’s currency as they make it a more attractive place for global investors to park their money.
Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank. If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold.
The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure. Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.
Economic Indicator Consumer Price Index (MoM) The United Kingdom (UK) Consumer Price Index (CPI), released by the Office for National Statistics on a monthly basis, is a measure of consumer price inflation – the rate at which the prices of goods and services bought by households rise or fall – produced to international standards. It is also the inflation measure used in the government’s target. The MoM figure compares the prices of goods in the reference month to the previous month. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
GBP/USD vzrostl po slabší americké inflaci, která snížila sázky na další zvýšení sazeb Fedu. Měnový pár se pohyboval kolem 1,3411 USD, asi o 0,5 % výše za den.
The Pound to Dollar (GBP/USD) exchange rate rallied on Tuesday after softer-than-expected US inflation data prompted investors to scale back expectations for another Federal Reserve interest rate hike.
At the time of writing, GBP/USD was trading around $1.3411, up approximately 0.5% on the day.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.338178 (+0.24%)
Euro to Dollar (EUR/USD): 1.142849 (+0.40%)
Dollar to Yen (USD/JPY): 162.13999 (-0.17%)
DAILY RECAP:
A clear US Dollar (USD) selling bias emerged on Tuesday after the latest US consumer price index showed inflationary pressures eased by more than expected last month.
June's Consumer Price Index reported that headline inflation slowed from 4.2% to 3.5% year-on-year, comfortably below forecasts for a more modest easing to 3.8%. Core inflation also undershot expectations, with annual core CPI easing to 2.6%.
In response, financial markets trimmed some of their more hawkish policy expectations for the Federal Reserve, with the odds for a September interest rate hike falling from around 70% to 50%.
Meanwhile, the Pound (GBP) found support during Tuesday's session as investors doubled down on bets that the Bank of England (BoE) will have to raise borrowing costs again.
The hawkish shift in market sentiment stems from a fresh spike in global energy markets. With conflict flaring up once more in the Gulf, the vital Strait of Hormuz shipping lane has been blocked, raising fears of a renewed inflation shock that could force the BoE’s hand before 2026 draws to a close.
Even so, Sterling's rally was tempered by cautious commentary from the head of the BoE.
Appearing before the Treasury Select Committee, BoE Governor Andrew Bailey struck a sober tone. He pointed out that the geopolitical unrest in the Middle East poses a serious threat to financial stability, while simultaneously reminding lawmakers that Britain's sluggish economic growth remains a heavy drag on the domestic outlook.
Near-Term GBP/USD Forecast: US Producer Prices in Focus Looking ahead, the next catalyst of movement for the Pound to US Dollar (GBP/USD) exchange rate will be the publication of the latest US producer price index on Wednesday.
A cooling in factory gate prices could weigh on the ‘Greenback’ in midweek trade, as we could see a further trimming of Fed rate-hike bets if there are further signs that US inflationary pressures are easing.
Meanwhile, movement in the Pound looks set to remain limited on Wednesday amid a lull in UK data ahead of Thursday’s GDP release.
The Pound to Dollar (GBP/USD) exchange rate retreated on Tuesday after touching a near three-week high overnight, as renewed geopolitical tensions boosted demand for the safe-haven US Dollar.
At the time of writing, GBP/USD was trading at $1.3371, down from an overnight high of $1.3398.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.335798 (+0.10%)
Euro to Dollar (EUR/USD): 1.142074 (+0.18%)
Dollar to Yen (USD/JPY): 162.26312 (-0.05%)
DAILY RECAP:
The US Dollar (USD) attracted renewed support on Tuesday, helping it reclaim some of Monday evening’s losses, as fresh tensions in the Middle East weighed on the market mood.
Sentiment deteriorated following attacks in the Strait of Hormuz overnight, with two commercial shipping vessels reportedly struck by projectiles.
The US has said that Iran is responsible for the attacks, with Washington expected to target Iranian sites in retaliation.
The latest escalation in geopolitical tensions sparked a cautious shift across markets, boosting demand for the US Dollar.
Meanwhile, the Pound (GBP) remained supported on Tuesday, with Sterling avoiding heavier losses despite an absence of notable UK economic releases.
GBP has strengthened in recent sessions as domestic political uncertainty continues to fade. Following Prime Minister Keir Starmer’s resignation, several would-be leadership rivals have thrown their support behind frontrunner Andy Burnham.
Investors have welcomed the prospect of a smoother transition, with months of speculation over Starmer’s future and the threat of a disruptive leadership battle now appearing to have passed. Burnham is widely expected to take over as Prime Minister without a contest, while maintaining the government’s existing fiscal framework.
This helped the Pound limit its losses against the US Dollar, even as a risk-off mood weighed on sentiment.
Near-Term GBP/USD Forecast: Fed Minutes to Influence the US Dollar? Looking forward, Wednesday evening brings the publication of the minutes from the Federal Reserve’s June interest rate decision, which could influence the US Dollar. If the minutes reveal an appetite for interest rate increases among Fed policymakers, the ‘Greenback’ could climb.
Elsewhere, market risk appetite could impact the GBP/USD pairing. If tensions escalate in the Middle East, a souring mood could support the safe-haven US Dollar and pressure the increasingly risk-sensitive Pound.
Sterling may remain somewhat supported by the continued unwinding of the political risk premium that had been priced into the Pound. However, with the Labour leadership nominations opening on Thursday, GBP could find itself subdued.
UOB vidí u GBP/USD silný růstový moment a další prostor k posunu k 1,3410. Průraz nad tuto úroveň by mohl otevřít 1,3445; pod 1,3300 by se býčí výhled zrušil.
United Overseas Bank’s (UOB) Quek Ser Leang highlights a sharp GBP/USD advance to 1.3397 and a firm close at 1.3391. Intraday, Leang sees scope for further gains toward 1.3410, though 1.3445 may stay out of reach. On a 1–3 week horizon, a break above 1.3410 could open 1.3445, while only a fall below 1.3300 would negate the positive Pound bias.
Pound rally faces layered resistance"24-HOUR VIEW: GBP rose to 1.3380 last Friday and then pulled back. When it was at 1.3345 yesterday, we highlighted the following: “While there is scope for GBP to pull back further, any decline is likely to be contained within a 1.3320/1.3375 range. In other words, GBP is unlikely to break clearly below 1.3320.” The subsequent price movements did not unfold as expected. GBP dipped to 1.3329 before staging a sharp advance to 1.3397. GBP closed on a firm note at 1.3391 (+0.29%). Strong momentum suggests further GBP strength toward 1.3410. A break above this major resistance is not ruled out, but based on the prevailing momentum, the next resistance at 1.3445 is likely out of reach. To sustain the momentum, GBP must hold above 1.3350, with minor support at 1.3370"
"1-3 WEEKS VIEW: We turned positive on GBP last Tuesday (30 Jun, spot at 1.3255), indicating that “while GBP could rebound further, it is currently unclear whether any advance can reach 1.3355.” After GBP broke above 1.3355, we highlighted on Friday (03 Jul, spot at 1.3345) that “the advance is overbought, but it could rise further and test 1.3410.” Yesterday, GBP rose to a high of 1.3397. A break above 1.3410 will not be surprising, and it could lead to a move to 1.3445. Overall, only a breach of 1.3300 (‘strong support’ previously at 1.3280) would indicate that GBP is not rising further."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
British Pound gains as easing Fed hike bets weigh on US DollarGBP/USD continues its winning streak for the ninth consecutive day, trading around 1.3390 during the Asian hours on Tuesday. The currency pair rises as the US Dollar (USD) faces headwinds as market participants scale back expectations for Federal Reserve (Fed) rate hikes this month and in September. This shift in sentiment followed a cooling employment report that revealed fewer jobs added across April, May, and June than Wall Street had anticipated.
Furthermore, a recent drop in crude oil prices, driven by an OPEC+ production boost and a US-Iran peace deal, has alleviated broader inflationary pressures, softening the urgency for an aggressive Fed policy outlook. Read more...
Pound Sterling rallies into its own coronationGBP/USD has quietly put together eight consecutive higher daily closes, a grind from near 1.3150 that has delivered the pair directly onto its 200-day Exponential Moving Average (EMA), with the 50-day EMA just beneath it and the 1.3400 handle immediately overhead. Monday added another modest gain: Cable based near 1.3350 through the London morning, then climbed all afternoon to stall just shy of 1.3400.
The interesting part is what did not stop it. A hawkish Federal Reserve (Fed) governor was on the wires mid-afternoon, US services data came in warm enough to keep the hike debate alive, and the pair rallied through all of it, which suggests Monday was less about fresh good news for the Pound and more about a Dollar that has run out of new arguments. Read more...
GBP/USD se drží beze změny kolem 1,3352, protože ústup britského politického rizika vyrovnal obnovenou poptávku po USD. Dolar podpořil i nákup po poklesu po pátečních datech z trhu práce.
The Pound to Dollar (GBP/USD) exchange rate traded in a narrow range on Monday as easing UK political uncertainty offset renewed demand for the US Dollar following last week's sharp selloff.
At the time of writing, GBP/USD was trading at $1.3352, little changed on the day.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.335559 (+0.03%)
Euro to Dollar (EUR/USD): 1.141696 (-0.17%)
Dollar to Yen (USD/JPY): 162.33951 (+0.61%)
DAILY RECAP:
The US Dollar attracted support on Monday as US markets reopened following the long Independence Day weekend.
The ‘Greenback’ seemed to have entered oversold conditions following its sharp losses in the wake of last week’s non-farm payrolls report, which reported an unexpectedly large slowdown in job creation.
Therefore, some price-conscious investors were willing to buy the dip, lifting the US Dollar.
Meanwhile, the latest ISM services PMI printed in line with expectations, easing from 54.5 in May to 54 in June. Although this was a slight softening of activity, it still represented a healthy expansion in the US services sector.
Meanwhile, the Pound (GBP) held strong on Monday as investors continued to scale back the political risk premium that has weighed on Sterling in recent weeks.
With MP Andy Burnham widely expected to become the next Prime Minister, markets appear increasingly confident that the UK will avoid a lengthy and disruptive Labour leadership contest.
Burnham has moved to reassure investors since launching his leadership bid, pledging to maintain the government’s existing fiscal rules while also outlining ambitious plans to support the economy.
This has been well received by GBP investors, with Sterling finding support as concerns over UK political instability continue to recede.
Near-Term GBP/USD Forecast: US Employment Data to Support the Dollar? Looking forward, high-impact data is thin on the ground on Tuesday, with the US weekly ADP employment change figure being the only release of note. This mid-tier data could support the US Dollar, if it reports healthy growth in US private employment.
Elsewhere, market risk appetite could influence the pairing. The safe-haven US Dollar would likely benefit if the market mood sours, while the increasingly risk-sensitive Pound could attract support if sentiment brightens. Any shifts in risk appetite could see GBP/USD waver.
