Fed Rate Cut Expectations Lift GBP/USD
The pound sterling held in the US$1.35–1.36 range against the US dollar on Wednesday (August 13th), driven by strong expectations that the Federal Reserve will cut interest rates in September. LSEG/CME data shows that market participants are now pricing in a 94% chance of a cut, as US inflation eased in July, putting pressure on the dollar and lifting riskier pairs like GBP/USD. The latest Reuters spot price puts GBP/USD around 1.35, with a range today of 1.35–1.36.
From the UK, the Bank of England (BoE) last week cut the Bank Rate by 25 bps to 4.00% in a narrow 5–4 vote, signaling the central bank's caution in the next phase of easing. The BoE, in its Monetary Policy Report (August), estimated GDP growth in the second quarter of 2025 at 0.1% (q/q). Investors now await the official ONS release of second-quarter GDP and June monthly GDP figures on Thursday, August 14, 2025, at 7:00 a.m. BST (1:00 p.m. WIB), which could potentially trigger further volatility in sterling.
Technically, the 1.3500 zone acts as intraday support (the lower bound of today's range), while 1.3600 serves as psychological resistance; the recent high around 1.3588, recorded on July 24, is also being eyed as initial resistance. A daily close above 1.3600 opens the door to this year's peak, while failure to hold above 1.3500 risks triggering a retest of lower support.
Looking ahead, the direction of GBP/USD will be determined by the combination of UK GDP figures and the Fed's rate cut narrative. Steady US inflation maintains a bearish bias toward the dollar, but a negative surprise from UK growth data could curb sterling's rally in the short term. (mrv)
Source: Newsmaker.id
