- GBP/USD trades below 1.3300 after closing in the red on Wednesday.
- The Bank of England is widely anticipated to cut the policy rate by 25 basis points.
- The US and the UK are expected to outline a trade agreement.
GBP/USD came under heavy bearish pressure in the late American session on Wednesday and lost more than 0.5% on the day, erasing a majority of its weekly gains in the process. The pair stays on the back foot early Thursday and trades below 1.3300.
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 Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.35% | -0.13% | 0.06% | 0.49% | 0.57% | 0.38% | 0.03% | |
| EUR | -0.35% | -0.22% | -0.03% | 0.40% | 0.50% | 0.30% | -0.04% | |
| GBP | 0.13% | 0.22% | -0.06% | 0.62% | 0.71% | 0.51% | 0.17% | |
| JPY | -0.06% | 0.03% | 0.06% | 0.44% | 0.53% | 0.41% | 0.10% | |
| CAD | -0.49% | -0.40% | -0.62% | -0.44% | -0.20% | -0.11% | -0.45% | |
| AUD | -0.57% | -0.50% | -0.71% | -0.53% | 0.20% | -0.20% | -0.53% | |
| NZD | -0.38% | -0.30% | -0.51% | -0.41% | 0.11% | 0.20% | -0.35% | |
| CHF | -0.03% | 0.04% | -0.17% | -0.10% | 0.45% | 0.53% | 0.35% |
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).
The US Dollar (USD) gathered strength against its rivals midweek as the Federal Reserve (Fed) adopted a cautious tone on policy-easing after leaving the policy rate unchanged at 4.25%-4.5%.
In the policy statement, the Fed noted that the uncertainty surrounding the economic outlook has increased further. Fed Chairman Jerome Powell told reporters in the post-meeting press conference that near-term inflation expectations have moved up because of tariffs and reiterated that they need to wait before adjusting the policy. The CME FedWatch Tool’s probability of a 25 basis points (bps) rate cut in June, which was at 55% on May 1, dropped to 20% after the Fed event.
The Bank of England (BoE) is expected to cut the policy rate by 25 bps to 4.25%. In case BoE Governor Andrew Bailey downplays heightened uncertainty surrounding the inflation outlook in the press conference and suggests that they will remain on track to ease the policy further, markets could see that as a sign of a diverging Fed-BoE policy and trigger a leg lower in GBP/USD. Conversely, the pair could gain traction if some policymakers vote in favor of a no change in policy rate and Bailey puts more emphasis on inflation rather than labor market conditions, or the growth outlook.
Later in the day, US President Donald Trump is scheduled to hold a press conference to announce a trade agreement with what he called a “big and highly respected country.” An official at the UK government reportedly confirmed Trump will outline a trade deal between the US and the UK. This development is unlikely to trigger a big market reaction.
GBP/USD Technical Analysis
GBP/USD was last seen trading near 1.3270, where the Fibonacci 23.6% retracement of the latest uptrend is located. In case the pair drops below this level and starts using it as resistance, additional losses toward 1.3200 (static level, round level) and 1.3165 (Fibonacci 38.2% retracement) could be seen.
On the upside, 1.3320-1.3330 (20-period Simple Moving Average (SMA), 100-period SMA, 50-period SMA) aligns as first resistance before 1.3400 (static level, round level) and 1.3450 (static level).
