Pound Sterling Price News and Forecast: GBP/USD slides as US yields spike, UK jobs market cracks
Forex Market update: The US Dollar rallies sharply against major currencies ahead of newly confirmed Fed Chair Kevin Warsh's upcoming swearing-in ceremony. Driven by widening yield gaps, sticky inflation, and expectations of a leaner central bank balance sheet, explore critical technical targets for the DXY, EUR/USD, and GBP/USD.
The Euro to Pound Sterling (EUR/GBP) exchange rate edged higher to 0.8681 after rebounding from last week's pullback from the 0.8720 area. EUR/GBP remains within the broad upward trend that has dominated much of the past year, with EUR/GBP up around 3% over the last 12 months.
Sterling softened after the latest UK labor market data reinforced expectations that the Bank of England is likely to adopt a more patient near-term stance on interest rates. The sharp decline in payroll employment, rising unemployment rate, and cooling wage growth excluding bonuses all pointed to a labor market that is gradually losing momentum, reducing pressure for immediate additional tightening from the BoE.
GBPUSD below 1.3485 which caused a further drop toward 1.3340-80. As we see over the chart, the market is facing a daily trend support around 1.3280 which could lead to a rebound with resistance around 1.3630.
Sticky US inflation and diplomatic signals from the Trump-Xi summit boosted the Dollar. DXY reclaimed $99.13 rejecting its descending channel while EUR/USD held blue trendline support and GBP/USD broke lower below $1.341.
Monday delivered a near-perfect combination of developments for sterling bulls, triggering a sharp reversal in UK assets after last week's fiscal and political turmoil hammered the pound and sent long-end gilt yields surging to levels not seen since the 1990s. Calming remarks from Labour leadership candidate Andy Burnham on fiscal discipline, an IMF growth upgrade, hawkish rhetoric from Bank of England rate-setter Megan Greene and another Trump TACO combined to fuel a sharp reversal in GBP/USD alongside a modest retracement in long-end gilt yields.
Pound Sterling Price News and Forecast: GBP/USD rises as Burnham reassures, Starmer pressure mounts
The Pound to New Zealand Dollar (GBP/NZD) exchange rate traded sideways on Monday as easing political anxiety in the UK helped Sterling stabilise, while stronger New Zealand PMI data supported the ‘Kiwi'. At the time of writing, GBP/NZD was trading around NZ$2.2816, little changed on the day.
The Pound to Euro (GBP/EUR) exchange rate slumped to a five-week low last week as escalating political turmoil in Westminster overshadowed stronger UK economic data and rattled Sterling investors. At the time of writing, GBP/EUR was trading around €1.1482, down roughly 0.7% on the week.
Pound Sterling Price News and Forecast: GBP/USD falls to near 1.3300 amid UK political uncertainty
GBP/USD Price Forecast: Sees more downside below 1.3300