- GBP/USD found the gas pedal and extended into a two-day bull run.
- US CPI inflation cooled in June, and reigniting rate-cut bets.
- US PPI wholesale inflation on the docket for Friday.
GBP/USD extended into a second day of a topside run, breaking through a firm supply zone and setting a fresh peak for 2024 near 1.2950. The pair set a new 50-week high as the Greenback tumbled across the board after US Consumer Price Index (CPI) inflation cooled to its lowest levels since 2021.
Forex Today: Focus remains on US inflation
In June, US CPI inflation was lower than expected. The annualized headline CPI inflation dropped to 3.0% YoY from the previous 3.3%, lower than the forecasted 3.1%. Additionally, CPI inflation decreased by -0.1% MoM in June, down from the previous month’s 0.0% and below the expected 0.1%.
For the week ending July 5, US Initial Jobless Claims decreased to 222K, down from the revised 239K of the previous week and better than the forecasted 236 K. This decline in jobless claims reduced the four-week average to 233.5K from the previous 238.75 K.
Due to the accelerated cooling of US CPI inflation, market expectations for a rate hike from the Federal Reserve (Fed) are now indicating the possibility of three quarter-point rate cuts in 2024. The CME’s FedWatch Tool is showing a 95% increase in the likelihood of a rate cut in September.
With US CPI data out of the way, all that’s left for the week is Friday’s US Producer Price Index (PPI) wholesale inflation print, which could throw a wrench in the works for rate-cut hopefuls. Core PPI for the year ended in June is expected to tick upwards to 2.5% from the previous 2.3% as businesses continue to face higher cost pressures than the Fed would like to see.
British Pound PRICE Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.00% | -0.01% | 0.32% | 0.00% | -0.06% | 0.14% | 0.07% | |
| EUR | -0.01% | -0.02% | 0.36% | -0.01% | -0.08% | 0.12% | 0.04% | |
| GBP | 0.01% | 0.02% | 0.37% | 0.00% | -0.07% | 0.14% | 0.05% | |
| JPY | -0.32% | -0.36% | -0.37% | -0.37% | -0.41% | -0.23% | -0.29% | |
| CAD | -0.01% | 0.00% | -0.01% | 0.37% | -0.07% | 0.12% | 0.04% | |
| AUD | 0.06% | 0.08% | 0.07% | 0.41% | 0.07% | 0.20% | 0.13% | |
| NZD | -0.14% | -0.12% | -0.14% | 0.23% | -0.12% | -0.20% | -0.07% | |
| CHF | -0.07% | -0.04% | -0.05% | 0.29% | -0.04% | -0.13% | 0.07% |
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).
GBP/USD technical outlook
The Cable’s Thursday bull run dragged the pair into a 50-week peak just shy of 1.2950, and the pair is up 2.65% from July’s early swing low near 1.2615.
Daily candlesticks have resumed a near-term topside run, closing in the green for all but two of the last eleven consecutive trading days. It’s the bulls’ game to lose as a bearish turnaround from here will drag GBP/USD back into major technical levels near the 200-day Exponential Moving Average (EMA) at 1.2606.
GBP/USD hourly chart
GBP/USD daily chart
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, aka ‘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
USD/JPY remains below 158.00 after Japanese data
Soft US Dollar demand helps the Japanese Yen to trim part of its recent losses, with USD/JPY changing hands around 157.70. Higher than anticipated Tokyo inflation passed unnoticed.
AUD/USD weakens to near 0.6200 amid thin trading
The AUD/USD pair remains on the defensive around 0.6215 during the early Asian session on Friday. The incoming Donald Trump administration is expected to boost growth and lift inflation, supporting the US Dollar (USD). The markets are likely to be quiet ahead of next week’s New Year holiday.
Gold depreciates amid light trading, downside seems limited due to safe-haven demand
Gold edges lower amid thin trading following the Christmas holiday, trading near $2,630 during the Asian session on Friday. However, the safe-haven asset could find upward support as markets anticipate signals regarding the United States economy under the incoming Trump administration and the Fed’s interest rate outlook for 2025.
Floki DAO floats liquidity provisioning for a Floki ETP in Europe
Floki DAO — the organization that manages the memecoin Floki — has proposed allocating a portion of its treasury to an asset manager in a bid to launch an exchange-traded product (ETP) in Europe, allowing institutional investors to gain exposure to the memecoin.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
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.