- GBP/USD holds steady above 1.3050 in the European session.
- The pair could gather recovery momentum if it clears 1.3100.
- The upbeat macroeconomic data releases from the UK support Pound Sterling early Friday.
GBP/USD clings to small daily gains early Friday after closing marginally lower on Thursday. The pair could extend its recovery if it manages to flip 1.3100 into support.
British Pound PRICE This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the weakest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.23% | 0.32% | 0.10% | 1.41% | 0.81% | 1.06% | -0.20% | |
| EUR | -0.23% | 0.15% | -0.10% | 1.20% | 0.56% | 0.82% | -0.46% | |
| GBP | -0.32% | -0.15% | -0.29% | 1.06% | 0.41% | 0.70% | -0.49% | |
| JPY | -0.10% | 0.10% | 0.29% | 1.30% | 0.69% | 0.90% | -0.29% | |
| CAD | -1.41% | -1.20% | -1.06% | -1.30% | -0.56% | -0.35% | -1.59% | |
| AUD | -0.81% | -0.56% | -0.41% | -0.69% | 0.56% | 0.30% | -0.98% | |
| NZD | -1.06% | -0.82% | -0.70% | -0.90% | 0.35% | -0.30% | -1.22% | |
| CHF | 0.20% | 0.46% | 0.49% | 0.29% | 1.59% | 0.98% | 1.22% |
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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
After coming in within a touching distance of 1.3000 in the early American session on Thursday, GBP/USD managed to erase a portion of its daily losses as the mixed macroeconomic data release from the US limited the US Dollar's (USD) strength.
The US Bureau of Labor Statistics reported on Thursday that inflation in the US, as measured by the change in the Consumer Price Index (CPI), softened to 2.4% on a yearly basis in September from 2.5% in August. Furthermore, the core CPI, which excludes volatile food and energy prices, rose 3.3% on a yearly basis, surpassing the market forecast of 3.2%, with the monthly core CPI increasing 0.3%. Other US data showed that the weekly Initial Jobless Claims rose to 258,000 in the week ending October 5 from 225,000 in the previous week, reviving concerns over a cooldown in the labor market.
Meanwhile, the UK's Office for National Statistics announced in the European morning on Friday that the Gross Domestic Product (GDP) expanded by 0.2% on a monthly basis in August, matching analysts' estimate. In the same period, Industrial Production and Manufacturing Production grew by 0.5% and 1.1%, respectively. These readings seem to be helping Pound Sterling stay resilient against its peers.
Ahead of the weekend, September producer inflation data will be featured in the US economic calendar. Investors see the monthly core Producer Price Index rising 0.2% in September, following the 0.3% increase recorded in August. In case the monthly core PPI comes in below the market expectation, GBP/USD could stretch higher in the American session.
GBP/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart holds above 40 in the European session, suggesting that sellers remain reluctant to bet on an extended slide for now. On the upside, 1.3100 (Fibonacci 78.6% retracement level of the latest uptrend) aligns as key resistance level before 1.3170 (Fibonacci 61.8% retracement).
Looking south, interim support could be spotted at 1.3050 (static level) ahead of 1.3000 (round level, static level) and 1.2940 (static level).
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD extends recovery beyond 1.0400 amid Wall Street's turnaround
EUR/USD extends its recovery beyond 1.0400, helped by the better performance of Wall Street and softer-than-anticipated United States PCE inflation. Profit-taking ahead of the winter holidays also takes its toll.
GBP/USD nears 1.2600 on renewed USD weakness
GBP/USD extends its rebound from multi-month lows and approaches 1.2600. The US Dollar stays on the back foot after softer-than-expected PCE inflation data, helping the pair edge higher. Nevertheless, GBP/USD remains on track to end the week in negative territory.
Gold rises above $2,620 as US yields edge lower
Gold extends its daily rebound and trades above $2,620 on Friday. The benchmark 10-year US Treasury bond yield declines toward 4.5% following the PCE inflation data for November, helping XAU/USD stretch higher in the American session.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.