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GBP/USD Holds Steady Above 1.3700 as Markets Wait for Critical US PCE Inflation Report

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  • June 27, 2025
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GBP/USD currency pair holds a strong position above the level of 1.3700 in Friday’s Asian trading session, quote near 1.3735 as the Pound is supported by market sentiment over a weakening US Dollar. The Greenback is still under selling pressure in light of speculation surrounding the future autonomy of the Federal Reserve, particularly following the suggestion of former President Donald Trump of making a premature choice for the next Fed Chair, building anticipation of more rapid-than-expected US rate cuts. Also, less than impressive US GDP numbers, highlighting a deeper-than-projected 0.5% decline in Q1, have further hampered the USD. While the Pound is supported, dovish Bank of England signals can cap the upside for GBP/USD, as investors look ahead to the coming US PCE inflation data for clearer guidance. KEY LOOKOUTS • An important guide for future Fed policy; better-than-expected data could underpin the USD, with poor data underpinning rate cut chances. • Trump’s words on selecting the next Fed Chair could impact USD sentiment and investor confidence in the independence of the Fed. • The deeper-than-anticipated 0.5% Q1 GDP drop reinforces worries regarding the strength of the US economy, pushing down the Greenback. • BoE Governor Andrew Bailey’s comments on a weakening labor market and possible rate reductions could cap gains in the Pound. GBP/USD currency pair is trading on a higher ground above the 1.3700 level, underpinned by a weakening US Dollar due to increasing fears about the Federal Reserve’s autonomy and increasing prospects of premature rate cuts. Remarks made by former President Donald Trump regarding choosing the next Fed Chair shortly have created heightened speculation regarding the Fed’s policy direction, further bearing down on the Greenback. At the same time, a deeper-than-anticipated US GDP contraction has provided further pressure on the USD. Nevertheless, the potential upside for the Pound can be limited by the dovish stance of the Bank of England as evidence of a decelerating UK labor market instills prudence in investors. The spotlight now shifts to the US PCE inflation report, which may inject some fresh signals into the direction of the pair. GBP/USD holds firm above 1.3700 as the weaker US Dollar, fueled by Fed uncertainty and weak economic data, dominates. Market attention now turns to the US PCE inflation figure, which may dictate expectations of future Fed policy actions. • GBP/USD at 1.3735, remaining positive territory in Friday morning Asian trading. • US Dollar loses ground amidst fears of the Fed’s autonomy and leadership change. • Trump’s comments on selecting a new Fed Chair stoke market speculation regarding prior rate reductions. • US GDP contracted 0.5% in Q1, which was worse than forecast -0.2%, further depressing the USD. • BoE leaves interest rates steady at 4.25%, but dovish remarks suggest future reductions. • UK labor market is weakening, adding to caution over the Pound’s upside. • Friday’s US PCE inflation reading may propel the next major movement in GBP/USD. The GBP/USD currency pair is drawing increasing attention as overall market mood continues to support the Pound versus the US Dollar. Increased doubts regarding the Federal Reserve’s autonomy have been at the forefront after previous President Donald Trump expressed that he might name a replacement for Chair Jerome Powell earlier than anticipated. This has put uncertainty on the market, with investors keenly observing how this could impact future monetary policy direction. To this view was added the recent US GDP data that recorded a sharper-than-projected decline, which is causing worry over the overall state of the US economy. GBP/USD DAILY PRICE CHART SOURCE: TradingView For their part, policymakers at the Bank of England have taken a very dovish stance. Governor Andrew Bailey last week spoke about evidence of a softening labor market and hinted at the possibility of the trend of declining interest rates persisting. While the central bank left rates unchanged at its last meeting, there was internal dissent with three of the nine members voting to cut the rate. These contradictory signals on both sides of the Atlantic are maintaining investors wary, with most waiting for Friday’s US PCE inflation data release for more explicit policy guidance ahead. TECHNICAL ANALYSIS GBP/USD remains in a bullish tone as it trades well above the 1.3700 psychological support level, hinting at continuous buying demand. The duo is comfortably supported by an ascending short-term trendline, with momentum indicators like the RSI remaining in the top half of their scale, reflecting strength in the rise. A break above the near-term resistance around 1.3750 could pave the way for further upside towards the 1.3800 area. On the other hand, a fall below 1.3700 could indicate waning momentum and bring in the next support zone around 1.3650. FORECAST If the US PCE inflation data later this week turns out to be softer-than-anticipated, it would add strength to market expectations of premature Federal Reserve rate cuts and further weaken the US Dollar. This would be likely to find support for sustained GB/USD upside, particularly if UK economy sentiment is relatively robust. A firm push past the 1.3750 resistance level may take the pair towards 1.3800 and beyond, as bulls gain strength on the back of softer US economic data and political turmoil around the Fed’s next leadership. Conversely, if the US PCE data surprises positively, it will stymie rate cut hopes, and could lend near-term support to the US Dollar. This could result in a pullback in GBP/USD, particularly if dovish comments from the Bank of England remain a drag on the Pound. A fall below the 1.3700 support level could reveal more downside to 1.3650 or even 1.3600, especially if risk appetite turns defensive or better US data brings renewed confidence in the Greenback.

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Currencies GBP/USD

GBP/USD Firm Near Multi-Year High In Anticipation of Pivotal Fed and BoE Policy Announcements

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  • June 17, 2025
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GBP/USD currency pair remains firm above mid-1.3500s as investors wait for pivotal economic events, such as the UK CPI data and the forthcoming monetary policy announcements of both the Bank of England (BoE) and the US Federal Reserve (Fed). While dovish BoE hopes and recent weaker UK economic figures press on the British Pound, the US Dollar is also capped by increasing speculation of a September Fed rate cut. With recent mixed fundamentals and increased market risk aversion, the pair remains in a tight range, as investors hold back from taking firm positions in anticipation of such significant risk events. KEY LOOKOUTS • Inflation data will be carefully observed for guidance on the BoE’s future policy action. A lower print would reinforce rate cut bets. • Market attention remains on whether the BoE hints at a rate cut trajectory in light of recent developments of economic slowdown in the UK. • Any dovish message or confirmation of a September rate cut can pressure the USD and underpin GBP/USD. • Continued Middle East tensions and global trade uncertainties could drive safe-haven demand for the US Dollar. The GBP/USD pair is stuck in a range above the mid-1.3500s as traders prepare for a week of high-impact economic events. The next UK inflation figures and the Bank of England’s policy meeting should provide pivotal guidance for the British Pound, particularly in light of rising bets on a rate cut in light of soft economic data. At the same time, the US Federal Reserve’s rate decision will dictate the near-term direction of the US Dollar, which has come under pressure from anticipation of September easing. With mixed signals and general geopolitical worries, market participants are being cautious, holding the pair in a narrow trading range. GBP/USD hovers in a tight range over the mid-1.3500s as markets wait for the UK CPI and central bank action. BoE rate reduction hopes and dovish Fed sentiment keep both USD and GBP action contained. Traders sit on the sidelines in anticipation of significant event risks this week. • GBP/USD maintains its position above mid-1.3500s, without apparent intraday direction. • The pair is close to a three-year high, consistent with recent GBP strength. • Wednesday’s UK CPI data will be an important guide for BoE policy expectations. • BoE is likely to turn dovish in the face of dismal UK economic statistics. • Fed policy announcement on Wednesday can influence USD action heavily. • Market is expecting a possible Fed rate cut by September, capping USD advances. • Increasing Middle East tensions underpin USD’s safe-haven demand but limit volatility. The GBP/USD currency pair is in a period of consolidation as investors wait for a string of important economic events this week. Market participants are most keenly interested in the publication of the UK’s consumer price index (CPI) figures and the Bank of England’s monetary policy meeting, both of which should give important clues about the direction of interest rates in the UK. Recent evidence of UK economic contraction has grown speculation on the BoE’s potential to cut policy stance ahead of schedule, shaping sentiment towards the British Pound. GBP/USD DAILY PRICE CHART SOURCE: TradingView Conversely, the US Federal Reserve policy release is also under scrutiny, as market players seek directions regarding when possible rate cuts would be implemented later in the year. Although the US Dollar is held up by safe-haven appetite amidst geopolitical risks, hopes that the Fed would shift towards more accommodative policies are holding back aggressive bullish pressure. The overall market is reflecting a defensive tone as traders hold back from placing big bets until there is greater clarity from these crucial central bank events. TECHNICAL ANALYSIS GBP/USD remains in a very tight consolidation range just above the mid-1.3500s with a lack of strong momentum. The pair is still near its recent multi-year high, reflecting underlying bullishness, but the failure to break suggests indecision on the part of traders. Support is near the 1.3550 level and resistance near the recent high at 1.3600. A continued advance above this resistance would potentially set the stage for more upside, while a breakdown below support may indicate short-term weakness in front of the Fed and BoE announcements. FORECAST If the coming UK CPI data suprises to the higher side or the Bank of England takes a less dovish tone than anticipated, the British Pound might pick up speed. Moreover, anything the Federal Reserve suggests that there is a longer horizon before rate cuts would act to reinforce GBP/USD upside as well. Under these circumstances, the pair may break through recent highs and aim for levels above 1.3600, provided global risk sentiment should revive. On the other hand, a softer-than-anticipated UK inflation reading or definite indications of future rate reductions by the BoE will heavily burden the Pound. Should the Fed hold a relatively aggressive stance or geopolitical tensions escalate, US Dollar demand might be elevated, pushing GBP/USD down. A breach of the 1.3550 support will potentially usher in further losses towards the 1.3500 psychological level and maybe even lower.

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Currencies GBP/USD

GBP/USD Edges Higher as UK GDP Outlook Improves Amid US Dollar Pressure and Trade Uncertainties

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  • May 15, 2025
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GBP/USD is up near 1.3300 in anticipation of the UK’s Q1 GDP release, led by a weaker US Dollar as trade uncertainties continue. The UK economy is expected to report firmer growth of 0.6% in Q1 compared to 0.1% in Q4 2024, which supports investor confidence. In the meantime, US Dollar weakness continues as Washington seems to prefer a weaker currency to improve trade competitiveness. Nevertheless, hopes for hawkish Federal Reserve rate cuts have dissipated, capping the downside pressure on the USD. Traders are watching closely UK economic releases and forthcoming US retail sales and inflation data to determine the near-term prospects of both currencies. KEY LOOKOUTS • Focus in the markets is on the UK’s initial GDP growth rate, which is expected to display a significant acceleration to 0.6%, indicating potential economic strength. • Ongoing pressure on the US Dollar due to uncertainties around trade and potential Washington desire for a softer dollar to prop up exports. • Lower market expectations of decisive Fed rate reductions, with a mere 74% probability of a 25-basis-point reduction in September, affecting USD strength. • Recent labor data showed slower job growth and rising unemployment, but moderate wage increases may influence the Bank of England’s inflation outlook and policy decisions. Investors are closely watching several key factors as GBP/USD edges higher. The UK’s Q1 GDP data, expected to show growth of 0.6%, could reinforce confidence in the British economy’s recovery. At the same time, the US Dollar continues to come under pressure due to uncertainties and speculations over whether Washington prefers a weak dollar to promote exporters. The hopes for Federal Reserve rate decreases have, however, faded, capping the dollar’s losses. Moreover, slower job growth and softening wage increases in the UK’s labor market provide Bank of England’s inflation outlook complexity, making traders keep an eye out for possible changes in monetary policy. GBP/USD is rising as the UK’s Q1 GDP should indicate more robust growth, which will enhance market sentiment. The US Dollar is still under pressure due to trade uncertainty and weaker Fed rate cut expectations. On the other hand, UK employment data and wage levels continue to put the Bank of England’s policy direction in the spotlight. • GBP/USD is trading around 1.3300, helped by a weaker US Dollar in light of continued trade uncertainty. • The UK economy is forecasted to grow by 0.6% in Q1 2025, up from 0.1% in Q4 2024, signaling economic acceleration. • Washington may prefer a weaker dollar to enhance US export competitiveness. • Expectations for aggressive Federal Reserve rate cuts have eased, with only a 74% chance of a 25-basis-point cut in September. • Recent UK labor market data shows slower job growth, rising unemployment, and easing wage gains. • Some easing of the Bank of England’s inflation worry is possibly to be delivered by moderate wage growth. • Market attention turns to Friday’s UK GDP and factory data, followed by US Retail Sales and Producer Price Index (PPI) releases later this month. The British Pound is gaining strength as the UK heads to publish its first-quarter economic expansion figures. Forecasts are that the economy has improved at a better rate than it did last quarter, and that is helping increase confidence levels in investors. On the other hand, doubts about global trade and the prospects of the US Dollar are having an impact on movements in currency. The weaker US Dollar is behind the Pound’s rise, reflecting wider worries over continued trade tensions. GBP/USD DAILY PRICE CHART CHART SOURCE: TradingView Meanwhile, the British labor market also underwent some shifting, with gradual job growth slowing and a tiny increase in unemployment. Wages, though, continue to grow modestly, providing some upbeat news for the economy. Those watching closely, though, include investors who are monitoring closely the impact these indicators will have on the Bank of England’s forthcoming decisions. Over the next few days, some of the most important economic data from the UK and the US will further indicate the health of each economy as well as the path of their respective currencies. TECHNICAL ANALYSIS GBP/USD is exhibiting a bounce approaching the 1.3300 level of resistance indicating new buying interest following recent losses. The duo finds support from major moving averages, which have begun to slope and potentially trend upwards, signaling a change in momentum. Traders, however, need to observe confirmation of a break above this level, with the failure to do so prompting a retest of support levels around 1.3200. Overall, technical indicators suggest cautious optimism, with price action being closely related to forthcoming economic data releases. FORECAST If the UK Q1 GDP figures affirm more robust than anticipated growth, it has the potential to lend a big boost to the British Pound, moving GBP/USD into the region above 1.3300. Encouraging economic news could motivate investors to be more bullish on the Pound, aided in turn by a further softening of the US Dollar in response to ongoing trade-related uncertainty. Moreover, if the next UK factory figures and pay trends also improve, the Bank of England might keep a more aggressive stance, which would provide further bullish impetus to the currency pair. On the flip side, disappointing UK economic releases or indications the labor market is depreciating further might put downward pressure on the Pound and result in GBP/USD retracing towards important support zones near 1.3200. Additionally, if the US Retail Sales and Producer Price Index (PPI) figures are stronger than anticipated, they can revive rate hike expectations of the Federal Reserve or cap the losses of the dollar to place pressure on the GBP/USD pair. Traders also have to watch out for unexpected changes in global trade sentiment that lower risk appetite and cause the US Dollar to appreciate as a safe-haven currency.

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