- The GBP/USD is recovering from earlier losses, with increasing optimism regarding a potential resolution to the war, as discussions between Trump and Zelensky in Moscow seem possible.
- Fed’s Bowman continues to foresee three interest rate cuts by 2025, underlining a focus on employment while inflation cools down.
- The UK’s July CPI is anticipated to be 3.7%, and persistent inflation in services may pressure the Bank of England, potentially delaying the easing cycle later in the year.
On Tuesday, GBP/USD is hovering around 1.3500 as speculation rises about an end to the Ukraine-Russia conflict. Traders are also bracing for UK inflation data, the Federal Reserve’s July meeting minutes, and Chairman Jerome Powell’s speech at Jackson Hole.
Stirling stability with UK inflation data and traders waiting for Powell’s Jackson Hole speech
Investors are buoyed by geopolitical developments, as the pound starts to regain lost ground. Last Friday’s Trump-Putin summit set the stage for discussions on Monday between Washington and European leaders, including Ukraine’s President Zelensky. A report from Sky News Arabia mentioned that Putin suggested a meeting between Trump and Zelensky in Moscow.
In the meantime, commodity traders are gearing up for Powell’s Jackson Hole address. Governor Michelle Bowman reiterated her stance, predicting three interest rate cuts in 2025, emphasizing that the Fed should remain focused on its job mandate.
Looking at the data, U.S. housing starts rose 5.2% in July, climbing from 1.321 million to 1.428 million, surpassing expectations for 1.29 million. However, building permits decreased from 1.386 million to 1.354 million during the same timeframe.
Meanwhile, across the Atlantic, traders are zeroing in on the upcoming inflation figures for July. The Consumer Price Index (CPI) is set to be around 3.7%, with the Services CPI expected to increase by 4.8%. This inflation report may prompt the Bank of England (BOE) to adjust its policies, even though a recent Reuters poll suggests the bank’s rate will stabilize at 3.75%.
GBP/USD price forecast: Technical outlook
The GBP/USD trend appears stagnant but is supported by a 50-day Simple Moving Average (SMA) at 1.3497. The relative strength index (RSI) shows strength but isn’t moving much, hinting that the pair may trade sideways for now.
If the price climbs above the peak of 1.3565 reached on August 18, a test of 1.3600 might be next. Conversely, if GBP/USD drops below 1.3500, the first point of support will be the 50-day SMA followed by the 20-day SMA of 1.3416, and then moving towards 1.3400.
British pound prices this week
The following table displays the rate changes of the British pound (GBP) against major currencies this week, with the pound being the strongest against the Australian dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.41% | 0.40% | 0.40% | 0.29% | 0.75% | 0.36% | 0.13% | |
| EUR | -0.41% | -0.01% | -0.02% | -0.12% | 0.35% | -0.08% | -0.27% | |
| GBP | -0.40% | 0.01% | -0.10% | -0.11% | 0.36% | -0.07% | -0.30% | |
| JPY | -0.40% | 0.02% | 0.10% | -0.10% | 0.36% | -0.02% | -0.27% | |
| CAD | -0.29% | 0.12% | 0.11% | 0.10% | 0.44% | 0.07% | -0.20% | |
| AUD | -0.75% | -0.35% | -0.36% | -0.36% | -0.44% | -0.43% | -0.67% | |
| NZD | -0.36% | 0.08% | 0.07% | 0.02% | -0.07% | 0.43% | -0.26% | |
| CHF | -0.13% | 0.27% | 0.30% | 0.27% | 0.20% | 0.67% | 0.26% |
The heatmap illustrates the changes in major currencies. The base currency is identified in the left column, while the target currency is across the top. For instance, selecting the British pound from the left and moving horizontally to the US dollar shows the change represented in the box indicating GBP/USD.
