- The British Pound is trading below 1.3000 against the US Dollar as slowing inflation in the UK fuels the BoE’s dovish expectations.
- UK services inflation slowed to 4.9%, the lowest since May 2022.
- Growing speculation of a Trump victory in the US presidential election has strengthened the US dollar.
The British Pound (GBP) struggles to gain ground against its major peers on Thursday after facing an intense sell-off on Wednesday. The British currency plummeted following the release of the UK Consumer Price Index (CPI) for September, which showed inflation growing at a slower pace than expected.
Annual headline inflation slowed to 1.7%, below the Bank of England’s (BoE) target of 2%. The core CPI, which excludes some of the more volatile items, rose 3.2%, also below expectations. UK services inflation, a closely watched indicator for BoE officials making interest rate decisions, slowed to 4.9%.
Falling inflationary pressures have reinforced the BoE’s dovish expectations. Traders are considering an interest rate cut of 25 basis points (bps) in each of the two remaining policy meetings for the year. Before the release of the inflation data, market participants anticipated that the BoE would cut its key interest rates only once, either in November or December.
British Finance Minister Rachel Reeves welcomed the sharp fall in inflation ahead of her first budget, which she will present on October 30. A sharp decline in pricing pressures should allow Reeves to spend more money on development.
On the economic front, the next important data in the UK is retail sales for September, due to be released on Friday. Retail sales data, a key measure of consumer spending, is estimated to have declined 0.3% after gaining 1.1% in August on a monthly basis. On an annual basis, the measure of consumer spending is expected to have grown 3.2%, up from 2.5% in August.
Daily Market Summary: Pound Sterling Remains Vulnerable Against US Dollar
- Sterling bears take a breather after sliding near 1.2970 against the US Dollar in the London session on Thursday. However, the outlook for the GBP/USD pair remains vulnerable as the US Dollar rises further as traders have discounted big Federal Reserve (Fed) rate cut expectations in November.
- The US Dollar Index (DXY), which tracks the value of the Dollar against six major currencies, posts a new more than 10-week high near 103.60. Market participants do not expect the Fed to continue with large rate cuts, as recent US labor market data for September showed that the labor market remains quite resilient.
- According to the CME’s FedWatch tool, 30-day federal funds futures price data shows markets largely expect the central bank to cut interest rates by 25 basis points (bps) at both policy meetings in November and December.
- Meanwhile, rising expectations that former US President Donald Trump will win the US presidential election, scheduled for November 5, have strengthened the US dollar. Investors expect a Trump administration to provide looser financial conditions, higher import tariffs and tax cuts.
- In Thursday’s US session, investors will pay close attention to monthly US retail sales data for September, a key measure of consumer spending, due at 12:30 GMT. Economists expect retail sales to have grown 0.3%.
Technical Analysis: The British Pound is trading below 1.3000
The British Pound is trading below the psychological figure of 1.3000 against the US Dollar in London trading hours. The GBP/USD pair weakened after breaking below the four-day trading range, which extended between 1.3020 and 1.3100. Cable was already under pressure after sliding below the ascending trend line drawn from the December 28, 2023 high at 1.2827 in early October.
The short-term trend of the main appears vulnerable as the 20-day and 50-day EMAs near 1.3135 and 1.3100, respectively, are tilted lower.
The recent downward move in the Relative Strength Index (RSI) below 40.00 also suggests that bearish momentum is intensifying.
Looking down, the 200-day EMA near 1.2840 will be an important support zone for the British Pound bulls. To the upside, Cable will face resistance near the round figure of 1.3100.
The British Pound FAQs
The British Pound (GBP) is the oldest currency in the world (AD 886) and the official currency of the United Kingdom. It is the fourth most traded foreign exchange (FX) unit 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, which represents 11% of FX, GBP/JPY (3%) and EUR/GBP (2%). The British Pound is issued by the Bank of England (BoE).
Source: Fx Street

I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.