British Pound edges lower against US Dollar as key US economic releases approach

• Ahead of US flash Q3 GDP and PCE inflation releases, the British Pound slips against the US Dollar.
• 3.2% is the expected US economic growth rate for July-September, marking a faster pace of expansion.
• Rate increases at the upcoming Fed and BoE policy meetings remain firmly expected by investors.

1.3312 is the level approached by the British Pound (GBP) as it eases against the US Dollar (USD) in Thursday’s European session. A recovering US Dollar (USD) weighs on GBP/USD. Financial markets remain confident that the Federal Reserve (Fed) will raise interest rates in December, having held them unchanged at Wednesday’s policy meeting.

Near 102.20 at the time of writing, the US Dollar Index (DXY) is marginally firmer. The index tracks the Greenback against six major currencies. Wednesday saw the USD Index pull back after three consecutive days of gains.

Following September’s rate increase, the Fed kept its fed funds rate at "3.75–4.00%", as widely expected, according to MUFG/BTMU analysts. They emphasise, however, that the decision "included two dissents in favour of another rate increase," highlighting a persistent hawkish stance within the committee. The analysts also point out that Fed Chair Warsh "reiterated the Fed’s commitment to returning inflation to 2%".

Further tightening this year remains investors’ expectation, MUFG/BTMU add, noting that "markets continue to price around an 87% probability of a December rate hike,".

Scheduled for 12:30 GMT, the United States (US) flash Q3 Gross Domestic Product (GDP) release and September Personal Consumption Expenditure (PCE) Price Index figures are the next economic data in focus for investors.

Estimates put annualised US economic growth at 3.2%, up from the previous 2.2% reading. Core PCE inflation, the Fed’s preferred price gauge, is forecast to rise to 3.1% year-on-year (YoY), compared with 3% previously.

Next week’s monetary policy announcement from the Bank of England (BoE) is the focus in the UK. An interest rate increase of 25 basis points (bps), taking the rate to 4%, is considered almost certain.

GBP/USD: Technical Outlook

At 1.3307 on the daily chart, GBP/USD sits just below its 20-day exponential moving average (EMA) of 1.3318, maintaining a slightly bearish short-term outlook. This positioning suggests nearby dynamic resistance continues to limit the latest rebound. Meanwhile, a Relative Strength Index (RSI) reading of around 48 points to consolidation rather than directional momentum. Until the pair recovers the 1.3318 barrier, it remains exposed to downside risk.

The first upside hurdle is the 20-day EMA at 1.3318. A sustained move above it would reduce downward pressure and create scope for a wider recovery. The current dataset offers no clear support indicators, so recent chart lows may provide reference points for traders. The central technical question remains whether GBP/USD can clear the 1.3318 ceiling and remove the prevailing bearish bias.

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