- GBP/USD tallied another day of losses falling below 1.3050.
- US CPI came in mixed and markets reduced the odds of a 50 bps cut.
- Earlier in the session the UK reported weak GDP figures.
The GBP/USD pair remains under pressure, trading near 1.3045 as the market reacted to the latest US inflation data. Economic activity released during the European session seems to have added pressure on the pound.
While the headline inflation declined, annual core CPI, which excludes volatile food and energy prices, remained unchanged at 3.2% in August, in line with market expectations. However, on a monthly basis, both CPI and core CPI rose by 0.2% and 0.3%, respectively, exceeding market forecasts. The data has led traders to reduce the odds of a 50-basis-point rate cut by the Federal Reserve and the market is now pricing in an 85% chance of a 25-basis-point cut.
What weakened the GBP was the report of soft Gross Domestic Product (GDP) releases during the European sessions. Despite this, leading indicators point to a potential rebound in UK economic activity, suggesting that the Bank of England is unlikely to cut rates by more than the currently anticipated 50 basis points by year-end, which could provide some support for the GBP.
GBP/USD Technical Outlook
The GBP/USD pair's decline to 1.3045 reflects deepening bearish pressure, with key technical indicators like the Relative Strength Index (RSI) pointing down near 50 and the Moving Average Convergence Divergence (MACD) firmly positioned in negative territory. This suggests that bearish sentiment could persist in the short term especially if the RSI breaks the 50 barrier.
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
Gold nears $3,400; fresh record highs and counting amid USD sell-off
Gold price closes in on $3,400 as the record rally regains strength on Easter Monday. Concerns over US-China trade war escalation and the Fed’s independence smash the US Dollar to three-year troughs. RSI stays overbought on the daily chart, with thin volumes likely to exaggerate moves in Gold price.
EUR/USD trades with sizeable gains above 1.1500, at over three-year highs
EUR/USD trades over 1% higher so far this Monday as the relentless selling interest in the US Dollar keeps it well above the 1.1500 threshold - the highest level since November 2021. Growing concerns over a US economic recession and the Federal Reserve’s autonomy continue to exert downward pressure on the USD.
GBP/USD stays strongly bid near 1.3400 on intense US Dollar weakness
GBP/USD continues its winning streak that began on April 8, trading close to 1.3400 in early Europe on Monday. The extended US Dollar weakness, amid US-Sino trade war-led recession fears and heightened threat to the Fed's independence, continue to underpin the pair. Thin trading is set to extend.
How to make sense of crypto recovery – Is it a buy or fakeout
Bitcoin (BTC), Ethereum (ETH) and XRP, the top three cryptocurrencies by market capitalization, extend their last week’s recovery on Monday, even as trader sentiment is hurt by the US President Donald Trump’s tariff policy and announcements.
Five fundamentals for the week: Traders confront the trade war, important surveys, key Fed speech Premium
Will the US strike a trade deal with Japan? That would be positive progress. However, recent developments are not that positive, and there's only one certainty: headlines will dominate markets. Fresh US economic data is also of interest.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.