The Pound Sterling (GBP) jumps to near 1.3050 after gaining ground close to the psychological support of 1.3000 against the US Dollar on Friday. The GBP/USD pair gains ground as the USD struggles to extend its five-day winning streak, with the US Dollar Index (DXY) edging lower to near 103.65 from 103.87 on Thursday, which was the highest level in more than 10 weeks.
The outlook for the Greenback remains positive as traders appear to be betting that the Federal Reserve (Fed) will cut interest rates gradually rather than aggressively. According to the CME FedWatch tool, 30-day Federal Funds futures pricing data shows that there will be a 50 basis points (bps) decline in interest rates for the remainder of the year, suggesting that the Fed will cut its borrowing rates by 25 bps in November and in December.
Meanwhile, upbeat United States (US) monthly Retail Sales and lower weekly Jobless Claims have reinforced confidence in the resilience of the economy. Retail Sales rose by 0.4% in September, faster than estimates of 0.3%. The number of individuals claiming jobless benefits for the first time came in at 241K, lower than the 260K expected.
Apart from upbeat data and growing speculation for the Fed's gradual rate cut path, rising expectations of former US President Donald Trump winning the presidential election have also strengthened the US Dollar. Market participants expect that the Trump 2.0 administration will bring higher import tariffs, tax cuts and loosening financial conditions, which traders assess as US Dollar positive.
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Swiss Franc.
USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
---|---|---|---|---|---|---|---|---|
USD | -0.09% | -0.24% | -0.21% | -0.03% | -0.25% | -0.22% | 0.05% | |
EUR | 0.09% | -0.14% | -0.11% | 0.06% | -0.19% | -0.12% | 0.14% | |
GBP | 0.24% | 0.14% | 0.04% | 0.21% | -0.02% | 0.04% | 0.25% | |
JPY | 0.21% | 0.11% | -0.04% | 0.19% | -0.06% | -0.03% | 0.23% | |
CAD | 0.03% | -0.06% | -0.21% | -0.19% | -0.24% | -0.19% | 0.04% | |
AUD | 0.25% | 0.19% | 0.02% | 0.06% | 0.24% | 0.04% | 0.28% | |
NZD | 0.22% | 0.12% | -0.04% | 0.03% | 0.19% | -0.04% | 0.24% | |
CHF | -0.05% | -0.14% | -0.25% | -0.23% | -0.04% | -0.28% | -0.24% |
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).
The Pound Sterling discovers strong buying interest near the psychological support of 1.3000 in Friday’s London session. The GBP/USD strengthens after gaining ground near the 100-day Exponential Moving Average (EMA), which trades around 1.2990.
The 14-day Relative Strength Index (RSI) returns swiftly into the 40.00-60.00 range after slipping below it, suggesting that value-buying kicked in.
Looking down, the upward-sloping trendline drawn from the April 22 low at 1.2300 will be a major support zone for Pound Sterling bulls near 1.2920. On the upside, the Cable will face resistance near the 20-day EMA around 1.3120.
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