GBP/USD Forecast: Pound Sterling loses bullish momentum but finds support
GBP/USD lose more than 0.5% on Monday and erased a large portion of the gains it recorded on Friday. After finding support near 1.3430, the pair staged a rebound and was last seen trading above 1.3450.
Safe-haven flows dominated the action in financial markets late Monday and early Tuesday after United States (US) President Donald Trump renewed his threats of imposing tariffs on countries that discriminate against US technology firms. Additionally, Trump said that they will have to charge China “200% tariff or something” if they don’t give them more magnets, referencing to rare earth metals. Read more…
Pound Sterling gains slightly against US Dollar as Trump fires Fed’s Cook
The Pound Sterling (GBP) ticks up to near 1.3470 against the US Dollar (USD) during the European trading session on Tuesday. The GBP/USD pair edges higher as the US Dollar falls slightly after the ousting of Federal Reserve (Fed) Governor Lisa Cook by United States (US) President Donald Trump, which has increased concerns over the central bank’s independence.
On early Tuesday, US President Trump shared a letter on Truth.Social in which he announced the removal of Fed Governor Cook, citing that she made false statements on one or more mortgage agreements. Read more…
In August, the RBA cut the cash rate by 25 basis points, to 3.6%. RBA Governor Michele Bullock hinted at further policy easing during the press conference. She stating that the RBA’s 2025 forecasts are assuming a couple more cuts. Notably, the RBA didn’t dismiss the possibility of back-to-back cuts, indicating that board members will assess the data at each meeting.
When do economists expect the RBA to cut rates again?
AMP Head of Investment Strategy and Chief Economist Shane Oliver remarked on the RBA’s Meeting Minutes, stating:
“RBA minutes reiterated dovish guidance, noting the cash rate is ‘still somewhat restrictive’ & ‘some further reduction in the cash rate over the coming year’ is likely required, with reference to the pace being gradual and data determined. We expect cuts in Nov, Feb & May to 2.85%.”
Today’s inflation numbers would have to be significantly lower than in June to pressure the RBA into a September cut.
AUD/USD: Key Scenarios to Watch
Bearish AUD/USD Scenario: Softer inflation or dovish RBA cues. These factors could drag AUD/USD below the 50-day EMA and bring the 200-day EMA and $0.6450 support level into play.
Bullish AUD/USD Scenario: Hotter-than-expected inflation or hawkish RBA chatter. These factors could send AUD/USD toward the $0.6550 resistance level, paving the way toward the $0.66 level.
Explore our full AUD/USD analysis, including key trends and trade data, here.
AUD/USD Daily Outlook: Will Fed Speakers Narrow Rate Differentials?
While economists expect a November RBA rate cut, Fed Chair Powell’s hint of a near-term Fed rate cut sent AUD/USD to $0.65.
FOMC members’ support for a September rate cut and further policy easing in Q4 would narrow the US-Aussie rate differential in favor of the Aussie dollar. A narrowing rate differential may drive AUD/USD toward the $0.6550 level. A break above $0.6550 brings $0.66 into sight.
However, rising concerns about inflation over a cooling labor market could signal a less dovish Fed policy stance. Fewer rate cuts may widen the rate differential in favor of the US dollar. A wider differential could push AUD/USD below the 50-day EMA, exposing the 200-day EMA. If breached, $0.6400 would be the next support level.
The latest Euro to Dollar (EUR/USD) exchange rate forecast has been jolted by fresh political turmoil after President Trump moved to fire Fed Governor Lisa Cook, reviving concerns over Fed independence.
Despite Friday’s slide on Powell’s dovish Jackson Hole speech, the US Dollar has rebounded, keeping EUR/USD near 1.1625.
ING warns a break below 1.1580 could send the pair towards 1.15, though longer-term forecasts still point to gains back to 1.20.
EUR/USD Forecasts: Trump Fires Fed Governor Cook
After a slide on Friday following Fed Chair Powell’s speech, the dollar recovered ground on Monday.
The US currency dipped again in Asia on Tuesday as President Trump launched another assault on the Federal Reserve, but again bounced from lows with the Euro to Dollar (EUR/USD) exchange rate trading around 1.1625.
According to ING, the Euro is vulnerable to further near-term losses; “a break of support at 1.1580/90 could see follow-through to the 1.1500/1520 area – especially since investors probably added to EUR/USD longs on Friday’s dovish tilt from Powell.”
Save on Your EUR/USD Transfer
Get better rates and lower fees on your next international money transfer.
Compare TorFX with top UK banks in seconds and see how much you could save.
UoB is less bearish on the single currency; “The sharp decline appears to be running ahead of itself, and EUR is unlikely to weaken much further. Today, we expect EUR to trade in a range of 1.1600/1.1690.”
ING is still bearish on the dollar over the medium term with EUR/USD gains to 1.20.
A key issue will be whether there is durable damage to the dollar amid fears surrounding Fed independence.
Overnight, President Tump stated that he had dismissed Fed Governor Cook as a central bank governor.
According to Trump there was “sufficient reason” to believe Cook had made false statements on mortgage agreements, and cited constitutional powers which he said allowed him to remove her.
The allegations surround declarations of primary property residence.
Cook fought back aggressively; “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so.”
She added; “I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”
Mizuho chief strategist Shoki Omori commented; “Powell as of now seems to be fighting back but whoever comes next may just listen to whatever the White House wants. Not looking good.”
According to Vasu Menon, managing director of investment strategy at OCBC; “Trump’s move to fire Lisa Cook will cast a pall on Fed independence and could weigh on the dollar and U.S. Treasuries.”
He added; “However, don’t expect major market moves as Trump’s action is somewhat unprecedented and may be challenged in U.S. courts.”
Charu Chanana, chief investment strategist at Saxo noted; “Markets aren’t panicking, but they are recalibrating, earlier rate cuts look more likely after Cook’s removal.”
She also looked at the wider perspective; “But this isn’t just about rate cuts, it’s about Fed independence and the growing institutional risks in the U.S.”
The Euro has also been hampered by the French government’s decision to call a confidence vote on September 8th.
ING commented; “The numbers don’t look good in that his centrist party has 210 seats in parliament, while the far left and the far right have a combined 330 seats and have already said they will vote no.”
Like this piece? Please share with your friends and colleagues:
International Money Transfer? Ask our resident FX expert a money transfer question or try John’s new, free, no-obligation personal service! ,where he helps every step of the way,
ensuring you get the best exchange rates on your currency requirements.
The Pound to Euro exchange rate (GBP/EUR) outlook has turned increasingly negative after the single currency surged on Powell’s dovish Jackson Hole speech, pushing Sterling back under 1.1550.
Foreign exchange analysts warn the Pound Sterling forecast vs Euro looks increasingly fragile, with some institutions, such as Danske Bank, projecting GBP/EUR could slide to 1.1235 within 12 months.
Mixed UK data, stubborn 3.8% inflation, and doubts over Bank of England policy are keeping Sterling under pressure, while Euro resilience underscores the risk of deeper losses in the GBP/EUR outlook.
GBP/EUR Forecast: UK stagflation Fears
Danske Bank forecasts that the Pound to Euro (GBP/EUR) exchange rate will weaken to 1.1235 on a 6-12-month view.
Wells Fargo expects little GBP/EUR change by the end of 2025.
Save on Your GBP/EUR Transfer
Get better rates and lower fees on your next international money transfer.
Compare TorFX with top UK banks in seconds and see how much you could save.
The Euro surged on Friday after Fed Chair Powell indicated that a September rate cut was likely and the Pound to Euro (GBP/EUR) exchange rate retreated to just below 1.1550.
The latest UK data recorded a better-than-expected figure for government borrowing with an increased tax take following the National Insurance changes.
PMI business confidence data was mixed but did represent a slight positive as stronger growth in the services sector offset another weak performance by the manufacturing sector.
The headline and core inflation rates both increased to 3.8% for July which will cause further difficulties in setting monetary policy.
The Bank of England (BoE) policy debate remains a very live and key issue.
Deutsche Bank commented; “For the hawks a more resilient economy will only raise the bar for further rate cuts this year, until there’s more evidence that underlying inflation is slowing further, and wage settlement data is receding towards more target-consistent levels.”
ING is more confident that the bank will cut again this year; “UK inflation’s up, and markets are becoming increasingly sceptical that the Bank of England will cut rates again this year. But we’re sticking with our view that they will cut again in November by 25 basis points.”
It added; “Although prices are rising strongly, we reckon some of the concerns are overblown. And the BoE will be looking at the deteriorating jobs situation, and that could well influence their decision.”
Danske Bank remains wary over the UK fundamentals; “We increasingly see domestic factors and the relative growth outlook between the UK and the euro area as becoming GBP negatives. This is further amplified by divergence in the fiscal policy outlook with UK fiscal policy set to be tightened in the Autumn.”
UBS pointed to the stagflation risks; “we also note that the UK is already (and has been for some time) in a stagflationary situation. While the latest GDP data was stronger, it’s still well below potential and the labor market has been deteriorating subsequently.”
Danske added; “The key risk to seeing EUR/GBP trade substantially higher than our forecast is a sharp sell-off in global risk and/or renewed focus on the UK’s fragile fiscal position.”
SocGen expects Pound selling on rallies; “As the UK Government prepares to increase taxes, inflation remains persistently higher than in the rest of Europe and growth remains anaemic, short GBP against the rest of Europe is an attractive long, medium and short-term trade.”
Like this piece? Please share with your friends and colleagues:
International Money Transfer? Ask our resident FX expert a money transfer question or try John’s new, free, no-obligation personal service! ,where he helps every step of the way,
ensuring you get the best exchange rates on your currency requirements.
GBP/USD trades below 1.3500 in the European session following Monday’s decline.
The technical outlook doesn’t yet point to a buildup of bearish momentum.
A key support level seems to have formed at 1.3430.
GBP/USD lose more than 0.5% on Monday and erased a large portion of the gains it recorded on Friday. After finding support near 1.3430, the pair staged a rebound and was last seen trading above 1.3450.
Pound Sterling Price Last 7 Days
The table below shows the percentage change of British Pound (GBP) against listed major currencies last 7 days. British Pound was the weakest against the Japanese Yen.
USD
EUR
GBP
JPY
CAD
AUD
NZD
CHF
USD
0.12%
0.20%
-0.09%
0.32%
0.14%
1.25%
-0.21%
EUR
-0.12%
0.08%
-0.31%
0.20%
-0.08%
1.12%
-0.32%
GBP
-0.20%
-0.08%
-0.54%
0.13%
-0.11%
1.04%
-0.40%
JPY
0.09%
0.31%
0.54%
0.48%
0.30%
1.36%
-0.05%
CAD
-0.32%
-0.20%
-0.13%
-0.48%
-0.18%
0.91%
-0.52%
AUD
-0.14%
0.08%
0.11%
-0.30%
0.18%
1.16%
-0.28%
NZD
-1.25%
-1.12%
-1.04%
-1.36%
-0.91%
-1.16%
-1.42%
CHF
0.21%
0.32%
0.40%
0.05%
0.52%
0.28%
1.42%
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).
Safe-haven flows dominated the action in financial markets late Monday and early Tuesday after United States (US) President Donald Trump renewed his threats of imposing tariffs on countries that discriminate against US technology firms. Additionally, Trump said that they will have to charge China “200% tariff or something” if they don’t give them more magnets, referencing to rare earth metals.
In the second half of the day, July Durable Goods Orders and August Consumer Confidence Index data, published by the Conference Board, will be featured in the US economic calendar. The market reaction to these releases are likely to be straightforward and remain short-lived, with positive surprises supporting the USD and vice versa.
Meanwhile, investors will keep a close eye on fresh developments surrounding US President Trump’s feud with Federal Reserve (Fed) Governor Lisa Cook.
Trump announced on Truth Social late Monday that he has fired Fed Governor Cook. In response, Cook released a statement via her attorneys, noting that Trump has no authority to fire her and that she will carry out her duties. If markets grow increasingly concerned over the Fed losing its independence, the USD could come under renewed selling pressure and open the door for a leg higher in GBP/USD.
GBP/USD Technical Analysis
The Relative Strength Index (RSI) indicator stays slightly above 50 and GBP/USD trades above the 100-period and the 200-period Simple Moving Averages (SMAs), reflecting sellers’ hesitancy.
On the upside, 1.3500 (static level, round level, 50-period SMA) aligns as the immediate resistance level before 1.3540 (Fibonacci 61.8% retracement of the latest downtrend) and 1.3600 (static level, round level).
Looking south, support levels could be seen at 1.3460 (Fibonacci 50% retracement, 100-period SMA), 1.3430 (200-period SMA) and 1.3400-1.3390 (static level, Fibonacci 38.2% retracement).
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data.
Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates.
When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money.
When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP.
A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Important DisclaimersThe content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party’s services, and does not assume responsibility for your use of any such third party’s website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.Risk DisclaimersThis website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
The US dollar initially fell during the trading session on Tuesday, but it has bounced enough to see the 50 day EMA provide support. And it also is now threatening the 200 day EMA. I think we’re in an area here where we’re just killing time. And I think a lot of retail traders are probably stuck because they expected the US dollar to get eviscerated and we basically haven’t seen it fall apart. This is the old adage, the market has already priced it in.
So, with an interest rate cut in September and possibly December, you still have an interest rate differential that favors the US dollar against the Japanese yen, thereby, I believe, putting a bit of a floor in it.
AUD/USD Technical Analysis
The Australian dollar has been slightly positive against the US dollar, but really, this is still a “fade the rally” type of situation. It’s very underwhelming and the 0.6550 level continues to be a major barrier. The 200 day EMA sits just below the 50 day EMA sits right here. We formed a shooting star during the trading session on Monday.
I think you continue to see a lot of lackluster sideways action here, especially this time of year, because most assets are going to be missing volume, and therefore, you have to be very cautious expecting big moves. Short-term back and forth range bound trading is probably where you’re going to be seeing the Australian dollar move.
For a look at all of today’s economic events, check out our economic calendar.
Platinum price returned to form sideways range trading after recording the target at $1383.00, affected by the contradiction between the main indicators, especially by stochastic approach from 20 level, to notice its fluctuation near the moving average 55 at $1342.00.
Reminding you that the bullish scenario will remain valid, depending on the stability of the support at $1302.00, to keep waiting for gathering the positive momentum to ease the mission of surpassing the obstacle at $1383.00 reaching the next target at 1420.00 level.
The expected trading range for today is between $13300.00 and $1383.00
The EURJPY pair was forced to provide new sideways trading, attempting to face stochastic temporary negativity, to keep its positive stability within the bullish channel’s levels, noticing its repeated stability above the extra support level at 170.45.
If the price succeeded in gaining positive momentum, we expect activating the bullish attack by surpassing the initial obstacle at 172.35, then repeats the pressure on the barrier near 173.40 to find an exit for resuming the bullish attack in the upcoming period trading.
The expected trading range for today is between 171.25 and 173.40
The Pound to Euro (GBP/EUR) forecast has taken a bearish turn as Sterling once again failed to break 1.1600, leaving the currency stuck near 1.1565.
Hopes of a UK rebound have been dashed despite stronger data and record FTSE 100 highs, while the Euro has shown surprising resilience in the face of weak German GDP and deepening geopolitical risks.
Analysts warn the Pound Sterling forecast vs the Euro could slide further, with Danske Bank projecting GBP/EUR at just 1.1235 within the next 12 months.
GBP/EUR UPDATE
After again failing to hold above 1.1600 on Thursday, the Pound to Euro exchange rate (GBP/EUR) has been held in narrow ranges around 1.1565.
The Pound has not been able to capitalise on stronger-than-expected UK data or a fresh FTSE 100 index move to new record highs.
The Euro was also resilient against the Pound despite weaker-than-expected German data and no progress in securing any progress on the Ukraine situation.
Save on Your GBP/EUR Transfer
Get better rates and lower fees on your next international money transfer.
Compare TorFX with top UK banks in seconds and see how much you could save.
Danske Bank forecasts that GBP/EUR will retreat to 1.1235 on a 12-month view.
Revised German GDP data recorded a 0.3% contraction for the second quarter compared with the flash reading of a 0.1% decline with year-on-year growth held at 0.2%.
ING commented; “Today’s GDP release shows the recent wave of optimism that had caught the German economy in the first months of the year is not yet showing in the data.
It added; “In fact, after the surge in economic activity resulting from the US front-loading of German exports in the first quarter, the economy experienced a reversal of the front-loading effect, and the first full-blown impact of US tariffs took effect.”
Importantly, however, markets have priced out the potential for further interest rate cuts by the ECB which is providing net Euro support.
As far as UK data is concerned, the GfK consumer confidence index improved to -17 for August from -19 the previous month and compared with consensus forecasts of no change. Four of the five main components improved on the month, but there was a small dip in confidence surrounding the general economic outlook for the next 12 months and this figure is still well below the level of August 2024.
GfK Consumer Insights Director Neil Bellamy commented; “The improved sentiment on personal finances is welcome, but there are many clouds on the horizon in the form of inflation – the highest since January 2024 – and rising unemployment. There’s no shortage of speculation, too, about what the autumn Budget will bring in terms of tax rises.
He added; “While August’s Overall Index Score of -17 is the best this year, consumer confidence continues to move in a very narrow band, and there’s no sense that it is about to break out into fresher, more optimistic territory.”
Danske Bank remains wary over the UK outlook and still negative on the Pound. According to the bank; “We increasingly see domestic factors and the relative growth outlook between the UK and the euro area as becoming GBP negatives.”
Like this piece? Please share with your friends and colleagues:
International Money Transfer? Ask our resident FX expert a money transfer question or try John’s new, free, no-obligation personal service! ,where he helps every step of the way,
ensuring you get the best exchange rates on your currency requirements.
