1.34 area: British Pound hovers as BoE hike bets outweigh Fed doubts

1.3400 in sight for GBP/USD as Sterling buying holds firm.
November BoE rate rise fully priced in, with the US-UK rate gap potentially set to disappear.
70% odds for a December Fed rate rise despite robust GDP and inflation data.

Sterling gains 0.04% against the US Dollar. GBP/USD is trading close to 1.3400 as traders appear confident of a Bank of England (BoE) rate rise next week. Expectations for Fed tightening, however, are being scaled back despite Thursday’s solid US economic releases.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

November BoE rate rise supports GBP/USD as December Fed tightening bets recede

US economic growth reached 3.4% YoY in Q3, far exceeding forecasts. Inflation consequently remains elevated: Core PCE registered 3.1% YoY, above September’s reading but consistent with forecasts. Such figures would normally strengthen the case for a Fed rate rise. Yet Prime Terminal shows investors have reduced the implied probability to 70%, from around 84% on Wednesday following the Fed’s decision.

US equities are also under heavy selling pressure, led by technology shares. The Nasdaq is down over 3% after technology companies reported “disappointing tech earnings”, according to a Bloomberg article.

Investors responded favourably to the UK budget. Finance Minister John Healey delivered the first budget of PM Andy Burnham’s administration, keeping it aligned with former Chancellor Reeves’ fiscal rules.

Meanwhile, a rise in the Bank of England’s Bank Rate to 4% is expected. Swaps markets assign a 100% probability to the move. Should the BoE deliver, GBP/USD is positioned to extend its recovery, as the US-UK interest rate differential would narrow to 0.

October PMIs and US jobs data lead next week’s calendar

A busy US economic calendar awaits next week, with October’s ISM Manufacturing and Services PMI reports in focus alongside a series of employment releases. Labour market figures include JOLTS, ADP Employment Change and Initial Jobless Claims, culminating in the week’s main event, Nonfarm Payrolls.

1.3391 resistance in focus: GBP/USD technical price forecast

Chart Analysis GBP/USD — Daily price chart for GBP/USD

At 1.3392 on the daily chart, GBP/USD retains a slightly bullish near-term bias. The pair sits above a cluster of three simple moving averages near 1.3380. This points to underlying buying interest after price reclaimed the former resistance trend line at 1.3251, which now provides structural support. A descending resistance trend line is being tested, with a breakout level near 1.3391. Meanwhile, the Relative Strength Index (14) stands at 56.7, indicating positive momentum without an overbought signal.

A clear break above the nearby trend-line pivot at 1.3391 would bring resistance around 1.3656 and 1.3833 into view. These levels correspond to rising trend lines that previously provided support. Initial downside support lies in the 1.3392 region, ahead of the three-simple-moving-average cluster at 1.3380 and the reclaimed descending trend line near 1.3251. A break below the latter would undermine the prevailing bullish bias and create scope for a deeper correction.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Today’s Pound Sterling Performance

Today’s percentage moves in the British Pound (GBP) against the major currencies listed are set out below. Sterling recorded its strongest performance against the Euro.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.22%	-0.08%	-0.20%	-0.25%	-0.06%	-0.01%	-0.07%
EUR	-0.22%		-0.30%	-0.40%	-0.45%	-0.26%	-0.22%	-0.28%
GBP	0.08%	0.30%		-0.11%	-0.15%	0.03%	0.09%	0.00%
JPY	0.20%	0.40%	0.11%		-0.03%	0.15%	0.20%	0.13%
CAD	0.25%	0.45%	0.15%	0.03%		0.17%	0.23%	0.16%
AUD	0.06%	0.26%	-0.03%	-0.15%	-0.17%		0.04%	-0.02%
NZD	0.00%	0.22%	-0.09%	-0.20%	-0.23%	-0.04%		-0.06%
CHF	0.07%	0.28%	-0.00%	-0.13%	-0.16%	0.02%	0.06%

Percentage movements between major currencies are displayed in the heat map. Read the base currency from the left-hand column and the quote currency from the top row. Selecting the British Pound on the left and following its row across to the US Dollar, for instance, gives the percentage change for GBP (base)/USD (quote) in the corresponding cell.