GBP/USD Forecast and News
GBP/USD consolidates its gains above 1.2580, all eyes on US CPI data
GBP/USD consolidates its gains around 1.2590 during the Asian session on Wednesday. The major pair holds above the key 100-day EMA but remains capped under the 1.2600 hurdle. The US CPI and Retail Sales report for April will be in the spotlight.
Latest Pound Sterling News
GBP/USD Technical Overview
The 20-day and the 200-day Simple Moving Averages (SMA) form a pivot level at 1.2550. GBP/USD could attract bulls once it stabilizes above this level and starts using it as support. In this scenario, 1.2590-1.2600 (Fibonacci 50% retracement of the latest downtrend, psychological level) and 1.2635 (May 3 high) could be set as next targets.
On the downside, supports are located at 1.2500 (psychological level, 100-period SMA on the 4-hour chart), 1.2450 (Fibonacci 23.6% retracement) and 1.2400 (static level, psychological level).
Fundamental Overview
GBP/USD is having a difficult time gaining traction after rising nearly 0.3% on a daily basis on Monday. Ahead of the US producer inflation data and Federal Reserve (Fed) Chairman Jerome Powell's speech, the pair trades in a narrow band at around 1.2550.
The data published by the UK's Office for National Statistics showed early Tuesday that the ILO Unemployment Rate edged higher to 4.3% in the three months to March from 4.2%. This reading came in line with analysts' estimate. Annual wage inflation, as measured by the change in the Average Earnings Including Bonus, held steady at 5.7% and beat the market expectation of 5.3%. Nevertheless, the mixed data failed to provide a boost to Pound Sterling.
The US Bureau of Labor Statistics will release the Producer Price Index (PPI) data for April in the early American session on Tuesday. Investors expect the PPI ex Food & Energy to rise 0.2% on a monthly basis. A monthly increase of more than 0.3% in the core PPI could help the USD stay resilient against its rivals. On the other hand, a reading below the market consensus could weigh on the currency and help GBP/USD push higher. Ahead of Wednesday's Consumer Price Index (CPI) data, however, the market reaction could remain short-lived.
In the second half of the day, Fed Chairman Powell will appear at a moderated discussion with De Nederlandsche Bank (DNB) President Klaas Knot at the Foreign Bankers' Association's Annual General Meeting in Amsterdam. If Powell notes that they will stick to restrictive policy stance for longer than anticipated, investors could refrain from pricing in a rate cut in September and allow the USD to outperform its rivals. The CME FedWatch Tool shows that markets see a less than 40% chance that the Fed will keep the interest rate unchanged in September.
SPECIAL WEEKLY GBP/USD FORECAST
Interested in weekly GBP/USD forecasts? Our experts make weekly updates forecasting the next possible moves of the Pound-Dollar pair. Here you can find the most recent forecast by our market experts:
GBP/USD: Pound Sterling loses strength as BoE opens door to summer rate cut Premium
The British Pound (GBP) traded in a choppy fashion and struggled to extend gains seen in the previous couple of weeks against the USD, prompting GBP/USD to recoup ground lost in the first half of the week and flirt with the key 200-day SMA around 1.2540 on Friday.
GBP/USD Big Picture
GBP/USD Bullish Themes
GBP/USD BEARISH Themes
Latest GBP Analysis
Editors' picks
EUR/USD holds above 1.0800 ahead of Eurozone GDP, US inflation data
EUR/USD stays in positive territory above 1.0800 after registering its highest daily close in over a month on Tuesday. Investors await first-quarter GDP data from the Euro area and April Consumer Price Index data from the US.
GBP/USD consolidates its gains above 1.2580, all eyes on US CPI data
GBP/USD consolidates its gains around 1.2590 during the Asian session on Wednesday. The major pair holds above the key 100-day EMA but remains capped under the 1.2600 hurdle. The US CPI and Retail Sales report for April will be in the spotlight.
USD/JPY extends its upside above 156.50 ahead of US CPI, Retail Sales data
The USD/JPY pair trades in positive territory for the fourth consecutive day near 156.55 on Wednesday during the Asian session. The uptick of the pair is bolstered by the speculation that the Federal Reserve might maintain rates higher for longer amid the elevated inflation.
Gold price trades with a mild positive bias, US CPI and PPI data loom
Gold price posts modest gains on the weaker US Dollar on Wednesday. The rising gold demand from robust over-the-counter market investments, consistent central bank purchases, and safe-haven flows amid Middle East geopolitical risk act as a tailwind for XAU/USD.
Oil edges higher to near $78.50 due to drawdown in US inventories, Canada wildfires
West Texas Intermediate crude Oil price retraces its recent losses, trading around $78.30 per barrel during Wednesday's Asian session. The advance of the crude Oil prices could be attributed to the latest crude Oil supply update from the American Petroleum Institute released on Tuesday.
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GBP/USD YEARLY FORECAST
How could GBP/USD move this year? Our experts make a GBP/USD update forecasting the possible moves of the pound-dollar pair during the whole year. Don't miss our 2024 GBP/USD forecast!
2024 GBP/USD FORECAST
In the GBP/USD Price Forecast 2024, our analyst, Dhwani Mehta, notes there are plenty of unknowns and looming uncertainties that make it difficult to convincingly predict the course of the Pound Sterling against the US Dollar (USD) in the year ahead. On both sides of the Atlantic, increased odds of a recession, a dovish pivot in the monetary policies and general elections are foreseen as the key factors driving the GBP/USD price action next year, barring any unprecedented geopolitical risks. Read more details about the forecast.
GBP/USD witnessed a rollercoaster ride in 2023 but the Pound Sterling managed to preserve the recovery gains seen in the first half of the year to a 15-month high of 1.3142.
MOST INFLUENTIAL POLITICAL EVENTS IN 2024 FOR GBP/USD
BoE policymakers continue to push back against expectations of rate cuts next year. However, deteriorating economic performance prompted money markets to begin pricing in four 25 bps rate cuts starting from the summer, anticipating the key rate to be slashed from 5.25% to as low as 4.25% by the end of 2024. The first cut is expected as early as June, to 5.0%.
Even though the Bank of England largely shrugged off a 0.3% contraction in GDP for October, the prospect of a recession in the run-up to a 2024 national election remains high.
A general election is expected next year in the US and the UK, which could fuel intense volatility around the GBP/USD pair. Amidst looming inflation and growth concerns, the political developments on both sides of the Atlantic are likely to be closely followed.
Influential Institutions & People for the GBP/USD
The Pound VS Dollar can be seriously affected by news or the decisions taken by two main central banks:
The Bank of England (BoE)
The Bank of England is the central bank of the United Kingdom. Established in 1694 and privately owned in the beginning, the Bank was nationalised in 1946 so now is completely owned by the UK government. BOE's main reason to be is to maintain monetary and financial stability in the country. Some of its other tasks are producing secure bank notes, operating asset purchase facility and keeping the inflation low and stable. The bank is overseen by the Court, named used to reffer the board of directors, and is accountable to Parliament and the public.
BOE Official Website, on Twitter and Facebook
The Federal Reserve Bank (Fed)
On the other
FED Official Website, on Twitter and Facebook
Andrew Bailey
Andrew Bailey is Governor of the Bank of England since 16 March 2020. He was announced as the new Governor of the BoE on 20 December 2019. Bailey was born in Leicester in 1959 and graduated from Queens' College with a BA in History and a PhD from the Faculty of History, University of Cambridge in 1985. Before becoming the Governor of the BOE, Andrew worked at the Bank in a number of areas, most recently as Executive Director for Banking Services and Chief Cashier, as well as Head of the Bank's Special Resolution Unit (SRU). Previous roles include Governor's Private Secretary, and Head of the International Economic Analysis Division in Monetary Analysis.
Bailey on BOE'S Profile and Wikipedia
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed's Profile and Wikipedia
BOE NEWS & ANALYSIS
ECB NEWS & ANALYSIS
About GBP/USD
The GBP/USD (or Pound / Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. The pair is also called 'The Cable', referring to the first Transatlantic cable that was crossing the Atlantic Ocean in order to connect Great Britain with the United States of America. This term originated in the mid-19th century, which makes it one of the oldest currency pairs.
Pound Sterling - US Dollar represents two economies: British and American (from United States of America). The Cable is a closely watched and widely traded currency pair where the Pound is the base currency and the US Dollar is the counter currency. For that reason, all the macroeconomic data related to the US and the UK affects the price of this pair. One of the events which affected most the volatility of the pound vs. dollar was Brexit.
Related pairs
EUR/USD
The EUR/USD (or Euro Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The popularity of Euro Dollar is due to the fact that it gathers two main economies: the European and American (from United States of America) ones. This is a widely traded currency pair where the Euro is the base currency and the US Dollar is the counter currency. Since the EUR/USD pair consists of more than half of all the trading volume worldwide in the Forex Market, it is almost impossible for a gap to appear, let alone a consequent breakaway gap in the opposite direction.
Normally, the EUR/USD is very quiet during the Asian session because economic data that affects the fundamentals of those currencies is released in either the European or U.S. session. Once traders in Europe get to their desks a flurry of activity hits the tape as they start filling customer orders and jockey for positions. At noon activity slows down as traders step out for lunch and then picks back up again as the U.S. comes online.
USD/JPY
The USD/JPY (or US Dollar Japanese Yen) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: EUR/USD, GBP/USD, AUD/USD, USD/CHF, NZD/USD and USD/CAD. Japanese Yen has a low interest rate and is normally used in carry trades. This is the reason why is one of the most trades currencies worldwide. In the USD/JPY the US Dollar is the base currency and the Japanese Yen is the counter currency. The pair represents American (from United States of America) and Japanese economies.
Trading the USD/JPY currency pair is also known as trading the "ninja" or the "gopher", although this last name is more frequently used when referred to the GBP/JPY currency pair. The US Dollar Japanese Yen usually has a positive correlation with the following two pairs: USD/CHF and USD/CAD. The nature of this correlation is due to the fact that both currency pairs also use the US Dollar as the base currency, such as USD/JPY. The value of the pair tends to be affected when the two main central banks of each country, the Bank of Japan (BoJ) and the Federal Reserve Bank (Fed), face serious interest rate differential.