- GBP/USD remains steady amid hopes for a ceasefire between Trump and Putin, offsetting a quiet economic calendar.
- Market awaits Powell’s speech at Jackson Hole, along with FOMC Minutes and US PMI data.
- The UK’s CPI is anticipated to be 3.7%, adding pressure on the BOE after a 25 bps cut in the last meeting.
The GBP/USD pair has seen a slight drop of 0.08% during the North American trading session, largely because of thin economic news from both sides of the Atlantic. Still, there’s a sense of optimism among traders about the potential for a peace agreement between Ukraine and Russia, following Friday’s meeting between Trump and Putin. As it stands, the currency pair is trading around 1.3540.
Geopolitical landscape remains stable; FED and BOE policies are crucial for FX market dynamics
Geopolitical events are shaping the early part of the week, but key US data, Powell’s upcoming speech at Jackson Hole, and UK inflation figures could significantly influence market sentiment this week.
In the US, traders are keeping an eye on Powell’s talk, the release of FOMC meeting minutes, unemployment claims, second housing metrics, building permits, home starts, existing home sales, and the S&P Global Flash PMI.
Mixed inflation readings last week, on both consumer and producer fronts, stirred reactions in the Fed fund rate futures. Many market players expect a 25 basis point (BPS) rate cut at the September meeting. Some were even waiting for a larger 50 bps cut, especially after a soft consumer price index (CPI) report. However, a surprisingly high producer price index (PPI) threw off these expectations, leading many to recede from those predictions. Currently, nearly 15% of investors believe the Fed might maintain rates.
In the UK, the CPI for July is expected to hold steady at 3.7% year-on-year, putting additional pressure on the Bank of England (BOE). This situation creates a balancing act between supporting a weaker labor market and tackling rising inflation. In the previous meeting, the BOE opted for a reduction of 25 bps amid a close 5-4 vote. This decision was viewed as a hawkish cut, with market expectations for another reduction pushing into February 2026.
GBP/USD price outlook: Technical perspective
The rise in GBP/USD resumed last week after breaching the upper trend line of falling wedges, yet traders seem hesitant to push beyond the 1.36 mark. The relative strength index (RSI) appears bullish, although its momentum is somewhat waning. It seems likely that the currency pair may experience a pullback before continuing upward.
Should GBP/USD break through the 1.3500 level, a test of the 50-day simple moving average (SMA) at 1.3497 would be expected, followed by a 20-day SMA at 1.3418. Sellers might challenge the 100-day SMA at 1.3397, which could jeopardize the current uptrend. Conversely, if the pair surges above 1.3600, buyers could push prices toward 1.3565, which reflects the July 4 highs.
British pound prices this month
The table below outlines the performance of the British pound (GBP) against several major currencies this month, indicating a stronger position against the US dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -2.06% | -2.29% | -1.83% | -0.17% | -0.81% | -0.18% | -0.62% | |
| EUR | 2.06% | -0.15% | 0.24% | 2.00% | 1.41% | 1.78% | 1.53% | |
| GBP | 2.29% | 0.15% | 0.44% | 2.15% | 1.56% | 2.14% | 1.70% | |
| JPY | 1.83% | -0.24% | -0.44% | 1.68% | 1.04% | 1.57% | 1.23% | |
| CAD | 0.17% | -2.00% | -2.15% | -1.68% | -0.66% | -0.00% | -0.44% | |
| AUD | 0.81% | -1.41% | -1.56% | -1.04% | 0.66% | 0.57% | 0.26% | |
| NZD | 0.18% | -1.78% | -2.14% | -1.57% | 0.00% | -0.57% | -0.33% | |
| CHF | 0.62% | -1.53% | -1.70% | -1.23% | 0.44% | -0.26% | 0.33% |
The heatmap illustrates the changes in the major currencies. Choose a currency from the left column and one from the top row to see their relative performance.
