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Pound Sterling Price News and Forecast: GBP/USD sinks as the Fed overtakes the BoE

Federal Reserve hawkish hike sent Gold price lower

Gold prices are moving higher as traders prepare for the key event of the week.

Gold Gains Ground As Traders Focus On Falling Treasury Yields

Gold 160926 Daily Chart Gold rebounds as traders focus on falling Treasury yields and prepare for Fed decision.

Treasury yields are losing ground as some traders are ready to buy bonds despite worries about hawkish Fed. The yield of 2-year Treasuries declined towards the 4.61% level, while the yield of 10-year Treasuries pulled back towards 4.95%.

Analysts and traders expect that Fed will raise the federal funds rate by 25 bps to fight inflation triggered by high oil prices. In case the Fed is less hawkish than the market expects, gold prices will rally. It looks that some traders are ready to bet that Fed will be somewhat dovish, so they buy gold ahead of Fed decision.

U.S. dollar gained ground against a broad basket of currencies as traders focused on the better-than-expected Retail Sales report. Stronger dollar did not put any pressure on gold prices as traders remained focused on the pullback in Treasury yields and waited for Fed decision.

From the technical point of view, gold failed to settle below the support at $4300 – $4320 and rebounded towards the $4350 level. In case gold settles above $4350, it will head towards the $4400 level. A move above $4400 will open the way to the test of the resistance level at $4480 – $4500.

Silver Moves Higher As Traders Wait For Fed Decision

Silver 160926 Daily Chart Silver is moving higher as traders focus on the rebound in gold markets. Gold/silver ratio remained mostly unchanged near 67.50, which was neutral for silver markets.

Silver made an attempt to settle above the $65.00 level but lost momentum and pulled back. In case silver climbs above the resistance at $65.00 – $66.00, it will move towards recent highs near the $68.00 level. A move above the $68.00 level will open the way to the test of the psychologically important $70.00 level.

Platinum Tests Resistance At $1780 – $1800

Platinum 160926 Daily Chart Platinum made an attempt to settle above the $1800 level but failed to develop sufficient upside momentum and pulled back. Palladium markets were down by -0.2%, which was neutral for platinum.

Gold Price Forecast

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See all Gold forecasts The pullback in the oil markets did not provide support to platinum markets today. Brent oil pulled back towards the $106.00 level as traders hoped that Saudi Arabia could restart half of the key oil pipeline in the upcoming days. That said, oil prices stay high, which could put material pressure on the global economy and reduce demand for platinum.

In case platinum manages to settle above the resistance level at $1780 – $1800, it will head towards the next resistance at $1870 – $1890. A move above the $1890 level will push platinum towards the $1950 level.

On the support side, a move below $1750 will push platinum towards the neaerst support, which is located in the $1700 – $1720 range. In case platinum declines below the $1700 level, it will head towards the $1600 level.

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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.

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Gold price right before the hike

In silver’s case, today’s upswing is just a verification of the breakdown below the neck level of its own head-and-shoulders pattern. At the same time, it bounced off the declining, medium-term support line. Something will give in soon. The USD Index favors a bigger move to the downside.

The interest rate decision days tend to produce a lot of uncertainty, which tends to temporarily boost precious metals prices. After the decision, the uncertainty will decrease regardless of the decision itself.

Gold Price Forecast

Every new Gold analysis as it publishes, today's technical signal and key levels, live price — on one page.

See all Gold forecastsHow the Market Got to 94 Two weeks ago, the September hike was a 68 percent proposition. Here is the path from there to here, with the 10-year and gold’s settlement on each day.

The items I would weigh most are the last two rows of the checklist rather than the first. The Fed’s decision is a headline. The market’s reaction to the headline is what the charts record, and the reaction that matters is whether gold closes above or below the neckline tonight and whether silver, which led on the way up this morning, leads on the way down after 2:30. If the two-year yield rises on the decision, the market read it as hawkish whatever the statement said.

If it falls and the metals bounce, that bounce arrives with the 10-year near 5 percent and Brent above $105, and every bounce in that configuration this month has been sold within a session or two. I will be monitoring the reaction in real time and will write to you if anything requires action.

Oil: Cargoes Canceled The oil side did not wait for the Fed either. Saudi Aramco informed European customers on Tuesday that some September deliveries were canceled, loadings at Yanbu were suspended, and Argus quotes a source saying every Saudi shipment scheduled for the final ten days of September is at risk, with Yanbu holding about five days of crude. Commodity vessel traffic through Hormuz fell to four transits on Monday. Repair estimates for the East-West line still run from days to eight weeks, and Bernstein put $150 on the table as a scenario.

Brent settled at a four-month high on Tuesday and is easing about 1 percent this morning, which is the decision-day pattern in every market: a step back before the event, not a change of direction. Rystad’s line captures where the market is: the “relatively contained price reaction suggests the market still expects Saudi inventories to cushion exports in the near term,” and the cushion is five days deep.

They reached the 1.618 Fibonacci extension based on the entire 2020 – 2022 rally. It makes perfect sense for the top to be in from the technical point of view.

The current prices of crude oil, the outlook for it, as well as recent comments from the AI CEOs all justify the above from the fundamental point of view.

Where This Leaves Us My outlook and positions are unchanged, and the profit-take levels remain in place.

Gold bounced off the neckline into the decision with silver leading, which is the profile that has marked every short-term top since Labor Day, and the odds, the bond yields, and the settlements in the table above describe a market that has already done the Fed’s work. What happens at 2 p.m. is the announcement. What happens at the close is the analysis.

Yesterday, I wrote that the market is waiting for the Fed to agree. Today at 2 p.m., it finds out.

Thank you for reading today’s analysis – I appreciate that you took the time to dig deeper and that you read the entire piece. If you’d like to get more (and extra details not available to 99% investors), I invite you to stay updated with our free analyses – sign up for our free gold newsletter now.

Thank you.

Sincerely,

Przemysław K. Radomski, CFA

Fed rate rises will not necessarily put pressure on gold. The medium-term outlook for gold remains bullish. Ahead of the FOMC meeting, gold is rising sharply, gaining more than 1.2% intraday to $4,345. Over the past three weeks, the strengthening of the dollar and rising yields on US Treasury bonds have weighed on the price of the non-interest-bearing precious metal. However, as soon as the greenback retreated, gold quickly launched a counter-attack.

A rise in the federal funds rate from 3.75% to 4% appears a foregone conclusion. The base-case scenario for the interest rate futures market is a tightening of monetary policy and the FOMC’s forecast that it is prepared to do so again in 2026. This will stabilise the US dollar and is likely to suppress yields on long-term government bonds as fears subside that the Fed is losing control of the situation in the long term. Such a scenario is quite favourable for gold. If, however, the Committee forecasts three rate rises in its updated projections, the greenback will soar, whilst the precious metal will face a wave of sell-offs.

Former Fed Chair Jerome Powell was adept at smoothing out market sentiment regarding the FOMC’s forecasts. Will Kevin Warsh, an opponent of forward guidance, be able to do the same? His hawkish rhetoric following the June meeting and at Jackson Hole significantly strengthened the US dollar and triggered a decline in gold prices at the end of last month. Gold bulls have cause for concern this time around as well.

At the same time, the medium- and long-term outlook for the precious metal looks positive. A rate hike is sure to provoke discontent in the White House, whose pressure on the Fed is fuelling the ‘debasement trade’. US fiscal problems have not gone away, and the Treasury’s attempts to intervene in the currency and debt markets are increasing demand for decentralised finance assets.

In such circumstances, a fall in gold prices in response to the Fed’s decision to begin a cycle of rate rises could create ideal conditions for buying the metal.

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Gold Price Forecast

Every new Gold analysis as it publishes, today's technical signal and key levels, live price — on one page.

See all Gold forecasts The short-term range is $3942.10 to $4697.11. Its retracement zone is $4319.60 to $4230.51. On September 2, Spot Gold made a low from inside this zone at $4282.62. It led to a rally to $4510.93. This week, the market hit a low on Monday at $4261.38. Today, it hit an intraday high at $4360.50.

A new minor range has formed between $4510.93 and $4253.64.

What to Watch Wednesday comes down to one press conference. The market already paid for the hike. Gold already got the bounce from yields slipping below 5% and the dollar going quiet. Now Warsh has to talk and everything gold gained today is on the table. If he sounds like December is still live, this morning’s rally was the exit for late shorts, not the start of a recovery. If he sounds finished, gold has room to run because the metal held its floor three times this week while yields were at their worst and sellers could not break it.

The bias leans bearish with the main trend down on the daily swing chart, but the bears have a credibility problem. The 50-day moving average at $4280.99 and the retracement zone at $4319.60 to $4230.51 stopped the selling Monday, Tuesday and again Wednesday morning. Three tests and three failures to break through is not a pattern that gives sellers confidence heading into a Fed decision.

A push through $4382.28 would be a normal retracement and not a threat to the trend by itself. A move beyond it is different. That puts the main trend at risk with the swing top at $4510.93 as the level that changes direction.

On the downside, a break through $4253.63 would finally end the support defense that has been frustrating sellers all week with $4230.51 as the level where the real damage starts.

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We are hanging around the 50-day EMA, as well as the 200-day EMA, and have been consolidating for weeks now. Despite all of the noise out there, silver has been somewhat sideways. It’s been kind of interesting to watch, actually.

With the $60 level underneath being support and the $70 level above being resistance, we’re basically just hanging out in the middle right now. Longer term, I do like silver. There’s a major deficit in production, and demand is only going to increase over time. With that being said, I favor longer-term bullish positions.

But in the short term, I recognize we’re sitting right in the middle of a $10 range, which silver likes to trade in $10 ranges. Now we’re just going to have to wait to see what the reaction to the FOMC is.

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Euro trades cautiously against US Dollar ahead of expected Fed rate hike

Markets were a bit calmer during the first half European sessions, as oil prices eased lower and that encouraged some dip-buying in indices and gold. But the FX markets were little-changed, with the USD/JPY trading around that pivotal 155.00 handle ahead of the Federal Reserve’s rate decision later on. The pair has rebounded in recent days as rising US bond yields and elevated oil prices have shifted the market’s focus back towards inflation and the prospect of a more hawkish Fed rate hike than was the case a few weeks ago.

What is driving the USD/JPY pair?
Consequently, investors have once again been focusing on the yield differential between US rates and the rest of the world. This remains a significant headwind for major FX pairs like EUR/USD, CHF/USD and JPY/USD (I know, I know). That said, the prospect of a hawkish Bank of Japan has also kept a lid on the dollar’s gains against the yen, preventing the USD/JPY pair from following the broader dollar rebound more aggressively.

The result is a market that is now finely balanced ahead of the two important policy events. If oil prices continue to rise and Treasury yields remain elevated, the USD/JPY forecast could regain a more decisive bullish bias. That view would be challenged, however, by a significant surprise from either central bank.

Yields and oil retain market’s focus
Granted, the Fed will make some headlines today, but it is the recent global bond sell-off that financial markets are focusing the most on. Ahead of the FOMC decision, bonds have stabilised somewhat along with indices. This comes after the US 10-year Treasury yields moved above 5% this week for the first time since 2007, with surging energy prices, persistent inflation concerns and heavy government borrowing weighing on fixed-income markets.

The question now is whether the yields will continue to rise post-FOMC. A 25-basis-point rate increase is fully priced in, leaving the more consequential question of what policymakers signal about the path beyond today’s decision.

The renewed oil shock makes it unlikely for the Fed to be dovish about near-term policy. If the Fed warns about further hikes or implies thereof, that could keep US yields elevated and provide the dollar with a fresh source of support.

For the USD/JPY forecast, higher US yields relative to Japan make the pair a long candidate from a treading point of view, post-FOMC. But the focus will then quickly turn to the Bank of Japan.

BoJ guidance could determine the yen’s response
The Bank of Japan is expected to raise rates by 25 basis points on Friday, but much of that move is already reflected in market pricing. The yen’s reaction may therefore depend more on any guidance we get from Governor Ueda.  Unless the BoJ delivers a larger-than-expected increase or signals greater confidence in accelerating the tightening cycle, the decision may struggle to generate sustained yen strength.

That leaves USD/JPY exposed to a familiar policy divergence: a hawkish Fed could encourage investors to rebuild dollar-yen positions, while a less forceful BoJ could leave yen bulls disappointed.

Technical USD/JPY forecast and technical levels to watch
Source: TradingView.com
The USD/JPY has recovered to around 155.00 after rebounding from its recent lows. A clean break above the 155.00-155.30 area, ideally on a daily closing basis, could open the way towards 156.00–157.00 zone next. Above that, we have the larger 158.00–158.60 resistance zone next.

Conversely, failure to break and hold above 155.00-155.30 area would weaken the near-term bullish case and could send USD/JPY back towards 154.00 initially and then 153.00 next. A deeper pullback could expose the year-to-date low around 152.10.

Key scenarios to watch on the GBP/USD and DJIA charts amid rate-hike risks and a potentially hawkish FOMC decision tonight. These factors are supporting risk-off sentiment alongside strong trends across energy markets and U.S. Treasury yields.

Key developments in focus include:

The DXY is still holding its ground above the 98.50 support level, limiting gains across currency markets. USD/JPY, DXY Outlook: Short-Term Weakness, Long-Term Strength?
GBP/USD gains were capped below the 1.3680 resistance level and the upper boundary of the yearly contracting consolidation, signallng a short-term bearish bias.
The Dow Jones is still holding below the boundaries of its April–September 2026 uptrend, also signaling a short-term bearish bias.
The probability of a 25 bps rate hike tonight is above 90% (CME Fed Watch Tool)
Before reviewing the key scenarios for the pound and the Dow, it is worth noting the stretched price action in the U.S. 10-year Treasury yield, which is testing highs last seen in 2007 while daily momentum reaches overbought levels last seen in 2023.

At the same time, the UKOIL chart is testing yearly momentum highs, with overbought risks increasing as price action approaches a critical resistance and 7-month confluence zone.

US10Y Yield and UKOIL — Log Scale

Source: TradingView

These charts are being monitored ahead of the FOMC to assess the potential pullback risk across the broader escalation narrative.

Should both charts continue higher, particularly if UKOIL breaks above 108, risk-off pressure may persist across markets.

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Now back to the GBPUSD and Dow

GBP/USD Forecast: Weekly Time Frame — Log Scale

Source: TradingView

Throughout the year, the GBP/USD pair has traded within the boundaries of a contracting consolidation below the 1.38–1.3680 resistance zone.

The latest rebound in the DXY above the 98.50 support level coincided with another pullback in GBP/USD from the upper boundary of the consolidation, reinforcing the short-term bearish outlook.

A breakdown below the 1.3430 support level would accelerate the decline toward the lower boundary of the consolidation near 1.3340 and 1.3240.

These levels are defined using the Fibonacci extensions of the wave spanning July 2025, November 2025 and July 2026.

On the upside, a breakout above 1.3580 and 1.3680 would be required to confirm bullish continuation toward the 1.40 zone.

DJIA Forecast: Daily Time Frame — Log Scale

Source: TradingView

From a daily perspective, the Dow Jones is still holding below the uptrend support line that has been in place since the April 2026 lows.

The index is also holding above the 50% Fibonacci retracement of the May–August advance near 51,900.

Bearish scenario: A breakdown below 51,900 would target the 61.8% and 78.6% Fibonacci retracement levels near 51,200 and 50,300, respectively.

A sustained move below these levels would increase the risk of a broader bearish outlook for the year.

Bullish scenario: Reclaiming 52,600 and 52,400 would support the continuation of the bullish bias toward 54,000 and the yearly highs near 54,800. these levels are defined via the Fibonacci extension tool of the May-August-September wave.

A move above that level would reinforce the uptrend and expose the trendline connecting the higher highs since April 2026, near 57,000.

The Fed’s tone and crude oil’s price direction will likely play a key role in shaping the next potential market trends.

Written by Razan Hilal, CMT

Follow on X: @Rh_waves

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Gold rebounds as traders position for Fed interest rate decision

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GBP/USD rebounds from 0.786 Arc – Potential decline toward 0.618 Arc

British Pound: 1.3440–1.3420 support in focus against US Dollar - Societe Generale

GBPUSD hits another low   Cable's bearish run continued as sticky unemployment data added more pressure to the pair. Prices have been pushing lower after breaking below the dynamic support of 1.3500.

GBP/USD Price Forecast: Fails near 1.3500 as bears eye 200-SMA ahead of Fed decision

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Summary:

USD/CAD has advanced for five straight sessions despite oil near $100, as Fed hike bets, rising US Treasury yields near 5% and safe-haven demand from Middle East tensions outweigh traditional oil support CAD The upward momentum could be disrupted Federal Reserve sounds less hawkish, oil prices rise significantly, tensions in the Middle East ease, or if there are positive developments in trade talks between the US and Canada. Traders can position for ongoing dollar strength or potential reversals after the Fed's decision. Meanwhile, energy assets should benefit from high crude prices, no matter how currencies fluctuate in the short term. The foreign exchange market isn’t following its usual historical patterns right now. Even as crude oil prices have rebounded sharply, the US dollar (USD) has strengthened for five consecutive days against the Canadian dollar (CAD).

West Texas Intermediate crude has climbed to $100 a barrel or higher, a level not seen since May. This jump is partly due to supply worries in the Middle East. Yet, this goes against the usual pattern because higher oil prices typically strengthen the Canadian dollar, a currency often tied to commodity prices. As of early European trading session, the USD/CAD pair had hit an intraday high of 1.3939, the highest in nearly four weeks.

Why the Dollar Is Outperforming Several factors are contributing to the US dollar’s stronger performance. The market widely anticipates a 25-basis-point interest rate hike by the Federal Reserve at its upcoming meeting. This would be the first hike in over two years. Higher energy prices are also affecting what people expect inflation to do.

In August, US consumer prices went up 3.4% compared to last year, and prices for producers are also climbing. The interest you get on 10-year US Treasury bonds has gone above 5%, which is the highest it’s been since 2007. This rise widens the interest rate gap in favour of the US dollar.

Additionally, the continued climb in US Treasury yields makes dollar-denominated assets more appealing than Canadian government bonds. This yield difference pulls international investment toward the US dollar, overriding the advantages Canada gets from higher oil revenues. Geopolitical tensions also factor in.

Heightened tensions between the US and Iran, fighting near the Strait of Hormuz, and supply problems like a shut-down Saudi pipeline have both helped push up oil prices and the US dollar. At the same time, the Bank of Canada is likely to keep its interest rates as they are because core inflation is close to its 2% goal. This makes the US look better from a money policy perspective.

What Could Disrupt USD/CAD’s Upward Momentum? A few developments could shift the USD/CAD pair’s current upward trend. The Federal Reserve’s upcoming decision and its statement will be central to this.

If the Fed takes a less aggressive stance, or if policymakers signal the energy price shock is temporary, that could temper rate hike expectations and ease pressure on US yields.

Also, if US inflation or job numbers come in weaker than expected, leading people to believe the Fed might cut rates again, the difference in yields would shrink and could slow down USD/CAD’s rise.

A bigger jump in oil prices, significantly improving Canada’s trade balance, would also strongly support the Canadian dollar. This holds especially true if Middle East supply risks grow without a corresponding rise in global risk aversion.

Conversely, if tensions ease significantly, lowering oil prices and cutting safe-haven demand, the effects might be mixed. However, a clear drop in yields would likely help the Canadian dollar.

Opportunities for Traders This unusual market dynamic presents distinct opportunities. Traders betting on continued US dollar strength can watch Federal Reserve communications and yield trends for signs of more upside in USD/CAD. They’ll likely use resistance levels around 1.3930 as important reference points.

Meanwhile, those expecting a reversal might look for entry points during any post-Fed pullback, especially if oil prices stay high and support Canada’s economic fundamentals. Energy producers and related companies, of course, stand to gain from sustained high crude prices no matter what short-term currency shifts occur.

In the end, the Federal Reserve’s upcoming decision will likely determine if this trend continues or if energy prices and currency differences find a more balanced relationship.

What’s the main near-term catalyst for the USD/CAD pair?

The Federal Reserve’s September policy decision and statement will set the tone for rate expectations, Treasury yields, and the US dollar’s strength against the loonie.

How do higher oil prices usually affect the Canadian dollar?

As a major crude exporter, Canada’s currency usually strengthens when oil prices climb. That’s because energy exports boost the terms of trade and increase demand for the loonie.

What opportunities come from this divergence?

Traders might prepare for the dollar to keep strengthening or for a reversal after the Fed meeting. Meanwhile, energy assets could gain from higher crude prices, regardless of how the currency shifts in the short term.

The US dollar is consolidating against the yen and Canadian dollar ahead of the key event of the week — the Federal Reserve meeting. The Fed is widely expected to raise its policy rate by 25 basis points to a range of 3.75–4.00%. As this move is already largely priced in, attention will focus on the updated economic projections, dot plot and press conference. Investors will assess whether the September rate hike marks the beginning of a new phase of monetary tightening or whether the central bank will prefer to adopt a wait-and-see approach.

Expectations of a more hawkish Fed are supported by persistent inflationary pressures, recent employment data and rising oil prices. US retail sales data will provide an additional reference point ahead of the meeting. Strong figures could provide further support for the dollar, although the market reaction is likely to remain limited ahead of the Fed decision.

USD/JPY The decline in USD/JPY over the past two weeks has slowed around the key support area of 152.90–153.20. At the start of the week, the price tested this area several times, while buyers managed to establish a foothold above the psychological 155.00 level yesterday. Hawkish Fed rhetoric could support a corrective rise in USD/JPY towards 156.20–157.00. More cautious signals regarding further policy tightening, by contrast, could put renewed pressure on the dollar and lead to another test of the 152.90–153.20 area.

Key events for USD/JPY:

today at 15:30 (GMT+3): US core retail sales; today at 21:00 (GMT+3): US Federal Reserve interest rate decision; today at 21:30 (GMT+3): Federal Open Market Committee press conference.

USD/CAD USD/CAD has recovered from its recent lows and is testing the 1.3895–1.3940 resistance area, despite support for the Canadian dollar from elevated oil prices. A firm move above 1.3940, followed by the level turning into support, could pave the way for a rise towards 1.4000–1.4030. A failed attempt to establish itself above the current resistance area, by contrast, could trigger a renewed decline towards the 1.3760 support level.

Key events for USD/CAD:

today at 15:30 (GMT+3): Canadian building permits; today at 17:30 (GMT+3): US crude oil inventories; today at 18:30 (GMT+3): Federal Reserve Bank of Atlanta GDPNow indicator.

Overall, USD/JPY and USD/CAD remain in consolidation ahead of the key Fed decision. As a 25-basis-point rate hike is already largely priced in, the dollar’s subsequent reaction will depend primarily on the central bank’s projections and rhetoric. Signals pointing to further tightening could support gains in both pairs, while a more cautious Fed stance could put renewed pressure on the US currency.

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For precious metals, the importance of this distinction is paramount. US Treasury yields shoot up beyond 5% earlier this week as the energy shock from the Middle East together with persisting inflation drove expectations for tighter policy. Oil prices eased back on Wednesday following a surprise build in US crude inventories which provided some relief from the non-yielding assets.

Even though the dollar is at multi week highs, it still remains at at the upper end of the recent trading range, primarily due to the upcoming moves by the Fed. This would also keep both metals under pressure.

Gold still continues to have support as traders are concerned about the sustainability of the US fiscal policy. This also provides support to Gold as traders feel uncertain due to the ongoing geopolitics of Iran, the Gulf region and the energy infrastructure.

Silver also has similar support from monetary policies, but would be more negatively impacted from long prolonged cycles of manufacturing demand diminishing.

Gold neutral, silver neutral: The Fed’s expected hike does not impact outlook as much as possible signals of future tightening.

Fundamental bias: Gold neutral ahead of the Fed, provides insight into overall outlook which is expected to develop throughout the meeting, if the Fed’s forecast projects tighter monetary policy.

Silver Price Forecast: XAG/USD jumps to near $65 ahead of Fed's interest rate decision

Gold held inside of the previous week's [Video]

Pound-Australian Dollar could strengthen if UK inflation boosts BoE rate expectations, while a risk-off mood may keep the Aussie under pressure. The Pound Australian Dollar (GBP/AUD) exchange rate wavered near the previous day’s 12-day high on Tuesday, as a risk-off mood subdued the ‘Aussie’ and markets digested the UK’s latest jobs report.

At the time of writing, GBP/AUD was trading at AU$1.8904, virtually unchanged on the day.

Latest — Exchange Rates:

Pound to Dollar (GBP/USD): 1.347346 (-0.20%)

Australian Dollar to Dollar (AUD/USD): 0.712897 (-0.12%)

DAILY RECAP:

The Pound (GBP) was unsure on Tuesday as markets reacted to the latest UK labour market overview.

On the surface, the data showed broad stability in the British jobs market in the three months to July. Unemployment held steady, rather than rising as forecast, while wage growth printed in line with expectations.

However, some economists pointed out signs of underlying weakness below the headline figures.

In addition, concerns about surging UK bond yields pressured the Pound, amid fears that rising government borrowing costs could lead to tax hikes, spending cuts, and slower growth.

Meanwhile, the Australian Dollar (AUD) was subdued on Tuesday as a risk-averse market mood continued to dampen demand for the risk-sensitive currency.

Investors have grown increasingly concerned about the crisis in the Middle East this week as tensions escalate. Yemen’s Houthi rebels tightened their control over a key shipping route, while Saudi Arabia blamed Iraqi militants for an attack on a key oil pipeline.

Energy prices have surged as the conflict widens, raising fears about the impact on the global economy.

Near-Term GBP/AUD Forecast: UK Inflation to Support Sterling? Looking ahead, Wednesday brings the UK’s latest consumer price index, which could support the Pound.

Markets expect the CPI to show that price growth accelerated in August. Headline inflation is forecast to have risen from 2.9% to 3.1%, while core inflation is set to have increased from 2.6% to 2.7%.

If inflation accelerated last month – before this month's surge in oil prices – it could boost bets that the Bank of England (BoE) may consider raising interest rates sooner than expected.

However, a small rise in inflation may not be enough to move the needle on BoE bets ahead of the bank’s decision on Thursday.

As for the ‘Aussie’, global risk dynamics could drive the currency. If markets remain decisively risk-off, AUD could struggle.

Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.

Euro: Downside pressure toward 1.1490 against US Dollar – UOB