- GBP/USD trades lower to near 1.3470 as the British Pound faces selling pressure.
- The BoE left interest rates unchanged at 3.75% on Thursday.
- Market sentiment turns risk-on as oil prices fall significantly.
The British Pound (GBP) underperforms its major currency peers, trading 0.1% lower at around 1.3470 against the US Dollar (USD) during the early European trading session on Monday. The GBP/USD declines as traders reconsider Bank of England (BoE) interest rate expectations, following the monetary policy announcement on Thursday.
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.09% | 0.04% | -0.66% | 0.07% | -0.15% | -0.11% | 0.11% | |
| EUR | 0.09% | 0.12% | -0.60% | 0.16% | -0.07% | 0.02% | 0.16% | |
| GBP | -0.04% | -0.12% | -0.67% | 0.01% | -0.20% | -0.09% | 0.06% | |
| JPY | 0.66% | 0.60% | 0.67% | 0.66% | 0.42% | 0.53% | 0.65% | |
| CAD | -0.07% | -0.16% | -0.01% | -0.66% | -0.23% | -0.13% | -0.01% | |
| AUD | 0.15% | 0.07% | 0.20% | -0.42% | 0.23% | 0.09% | 0.29% | |
| NZD | 0.11% | -0.02% | 0.09% | -0.53% | 0.13% | -0.09% | 0.17% | |
| CHF | -0.11% | -0.16% | -0.06% | -0.65% | 0.01% | -0.29% | -0.17% |
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).
Analysts at Deutsche Bank stressed that the BoE was not “edging towards a rate hike,” a message that prompted a swift reassessment in market pricing. They note that investors “dialed back expectations for BoE hikes,” with the implied probability of a September move dropping from 60% to 30%. In parallel, Deutsche Bank highlights that “31bps of hikes [were] priced by year-end (-11.4bps on the day),” underscoring how the latest policy signals have tempered the market’s conviction in further tightening this year.
Last week, the BoE left interest rates unchanged at 3.75%, with a 6-3 majority, and stated that interest rate hikes would be needed if Middle East risks persist and second-round effects of inflation start emerging.
However, BoE Governor Andrew Bailey signaled in the press conference that the current state of inflation is not as bad as it thought. “Encouraging that CPI is below where we thought it would be,” Bailey said.
Meanwhile, the market sentiment is favorable for riskier assets, as oil prices have declined significantly due to a renewed ceasefire between the United States (US) and Iran. As of writing, S&P 500 futures are up 0.6% to near 7,535, reflecting a risk-on mood.
GBP/USD technical analysis
GBP/USD trades lower at around 1.3475, but reflects a bullish near-term bias as it holds above the 20-period exponential moving average (EMA), which is at 1.3389. The pair is at a critical level of 1.3470 where it could extend the advance or face a bearish reversal.
The Relative Strength Index (RSI) at 59 keeps a positive bias without yet signaling overbought conditions on the daily chart.
On the downside, the 20-day EMA around 1.3389 should let sellers press the pair lower. Looking up, the psychological level of 1.3500 is the key hurdle for British Pound bulls; a decisive break above that would improve the odds of further upside towards the July high at 1.3558.
