The British pound (GBP) dropped over 0.40% on Tuesday as investor sentiment declined, amidst discussions about recently appointed MP Andy Burnham taking over from Keir Starmer as prime minister after his two-year tenure. As of now, GBP/USD stands at 1.3195, having reached a daily peak of 1.3257 earlier.
UK Political Uncertainty and US Dollar Strength Contribute to GBP/USD Decline
The US dollar (USD) continued to rise consistently, with the US dollar index (DXY) achieving a new high for the year. The DXY measures the dollar’s value against a selection of six currencies, increasing by 0.34% to 101.34.
On Monday, British Prime Minister Keir Starmer announced his resignation, clearing the path for an orderly transition. In the meantime, yields on British Gilts have declined, indicating trepidation among investors who fear that a Burnham administration might ramp up spending and exert pressure on fiscal policy.
In the US, President Donald Trump claimed that Iran had consented to a nuclear inspection, a statement that the Iranian government refuted. Iranian UN Ambassador Ali Bareini mentioned that talks had made “good progress,” but stressed that five components of the original agreement would need to be fulfilled before negotiations regarding the nuclear program and the role of the International Atomic Energy Agency (IAEA) could commence.
S&P Global pointed out that US exceptionalism is backing the dollar as business activity grows. The Manufacturing PMI increased from 55.1 to 55.7 in June, surpassing the forecast of 54.8, while the Services PMI climbed from 50.7 to 51.3, also exceeding expectations of 51.
Federal funds futures suggest there’s an over 85% likelihood of a quarter-point interest rate hike by September.
Back in the UK, Bank of England (BoE) MPC member Alan Taylor remarked that it was sensible to keep interest rates steady, given that the central bank’s rate is already 75 basis points above his neutral forecast.
GBP/USD Price Forecast: Technical Analysis
On the daily chart, GBP/USD shows a bearish trend at 1.3198, positioned below the 50-day, 100-day, and 200-day simple moving averages around 1.3451, which currently acts as resistance for any potential rebound. The pair remains beneath a broader resistance trend line originating from the 1.3869 level, while the relative strength index hovering around 33 suggests ongoing, but not extreme, selling pressure.
On the lower side, initial support is around the uptrend line near 1.3159, where buying interest was observed during the previous decline. To see any recovery, the price will first need to contend with the SMA cluster around 1.3451, and only a sustained break above this level could lead to increased resistance around the 1.3869 mark.
(This technical analysis was supported by AI tools.)
Today’s Pound Price
The table below presents the percentage changes of the British Pound (GBP) against major currencies today. It seems the GBP is currently showing the strongest performance against the Australian dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.38% | 0.40% | -0.03% | 0.28% | 1.07% | 0.59% | 0.07% | |
| EUR | -0.38% | -0.01% | -0.44% | -0.13% | 0.65% | 0.18% | -0.32% | |
| GBP | -0.40% | 0.00% | -0.41% | -0.10% | 0.68% | 0.20% | -0.30% | |
| JPY | 0.03% | 0.44% | 0.41% | 0.30% | 1.10% | 0.62% | 0.09% | |
| CAD | -0.28% | 0.13% | 0.10% | -0.30% | 0.81% | 0.33% | -0.19% | |
| AUD | -1.07% | -0.65% | -0.68% | -1.10% | -0.81% | -0.46% | -0.98% | |
| NZD | -0.59% | -0.18% | -0.20% | -0.62% | -0.33% | 0.46% | -0.53% | |
| CHF | -0.07% | 0.32% | 0.30% | -0.09% | 0.19% | 0.98% | 0.53% |
The heat map illustrates the percentage changes between major currencies. The base currency is selected from the left column, and the quote currency is chosen from the top row. For instance, selecting British Pounds from the left and moving horizontally to US Dollars shows the percentage change in that cell, indicating GBP (Base)/USD (Quote).
