The Pound Sterling (GBP) trades flat around 1.3425 against the US Dollar (USD) during the European trading session on Monday. The GBP/USD pair struggles for a direction, while the US Dollar (USD) stabilizes on easing trade frictions between the United States (US) and China.
During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, ticks down to near 98.45. However, the US Dollar holds Friday’s recovery move, which came following comments from US President Donald Trump that an additional 100% tariffs on imports from China won’t be sustainable.
Over the weekend, US President Trump said in an interview with Fox Business that high tariffs were “not sustainable though it could stand”. He further expressed that Washington intends a good relationship with China, and is set to meet Chinese leader Xi Jinping later this month at the Asia-Pacific Economic Cooperation meeting in South Korea. “I think we’re going to be fine with China, but we have to have a fair deal. It’s got to be fair,” Trump said, Bloomberg reported.
Before the Trump-Xi meeting later this month, investors will focus on the meeting between US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, scheduled later this week in Malaysia. Negotiators from both nations are expected to discuss export controls announced by Beijing on rare earth minerals, which prompted trade frictions.
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.09% | 0.01% | 0.03% | 0.07% | -0.01% | -0.20% | -0.12% | |
| EUR | 0.09% | 0.12% | 0.19% | 0.16% | 0.10% | -0.11% | -0.02% | |
| GBP | -0.01% | -0.12% | 0.04% | 0.04% | -0.03% | -0.23% | -0.13% | |
| JPY | -0.03% | -0.19% | -0.04% | 0.00% | -0.05% | -0.32% | -0.18% | |
| CAD | -0.07% | -0.16% | -0.04% | -0.00% | -0.00% | -0.28% | -0.20% | |
| AUD | 0.00% | -0.10% | 0.03% | 0.05% | 0.00% | -0.09% | -0.11% | |
| NZD | 0.20% | 0.11% | 0.23% | 0.32% | 0.28% | 0.09% | 0.10% | |
| CHF | 0.12% | 0.02% | 0.13% | 0.18% | 0.20% | 0.11% | -0.10% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Daily digest market movers: Traders raised BoE dovish bets on slower UK wage growth
- The Pound Sterling underperforms a majority of its peers at the start of the week. The British currency faces pressure as investors turn cautious ahead of the United Kingdom (UK) Consumer Price Index (CPI) data for September, which will be released on Wednesday.
- Investors will closely monitor the UK inflation data to get cues about whether the Bank of England (BoE) will cut interest rates again in the remaining year. The inflation report is expected to show that the core CPI – which excludes the volatile components of food, energy, alcohol, and tobacco – rose at a faster pace of 3.7% on an annualized basis against the prior release of 3.6%.
- In the September policy meeting, the BoE anticipated that inflationary pressures would have peaked around 4%.
- Signs of price pressures growing at a faster pace would be a drag on expectations supporting more interest rate cuts by the BoE this year. On the contrary, soft numbers would boost the same.
- Last week, the confidence of traders that the BoE will cut borrowing rates again this year increased after the release of the UK labor market data for three months ending August, which showed a slowdown in wage growth and a further increase in the jobless rate.
- In the US, traders remain confident that the Federal Reserve (Fed) will cut interest rates at least 50 bps in the remaining year. According to the CME FedWatch tool, traders have almost priced in at least a 50 bps reduction in interest rates in the remaining year and see a 4.8% chance that the Fed could cut borrowing rates by 75 bps.
- This week, investors will focus on the delayed US CPI data for September, which will be released on Friday.
Technical Analysis: Pound Sterling struggles to return above 20-day EMA
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The Pound Sterling trades in a tight range around 1.3425 against the US Dollar on Monday. The GBP/USD pair strives to return above the 20-day Exponential Moving Average (EMA), which trades around 1.3423.
The 14-day Relative Strength Index (RSI) oscillates inside the 40.00-60.00 range, which indicates a sideways trend.
Looking down, the August 1 low of 1.3140 will act as a key support zone. On the upside, the psychological level of 1.3500 will act as a key barrier.
Economic Indicator
Core Consumer Price Index (YoY)
The United Kingdom (UK) Core Consumer Price Index (CPI), released by the Office for National Statistics on a monthly basis, is a measure of consumer price inflation – the rate at which the prices of goods and services bought by households rise or fall – produced to international standards. The YoY reading compares prices in the reference month to a year earlier. Core CPI excludes the volatile components of food, energy, alcohol and tobacco. The Core CPI is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
