The pound sterling (GBP) is losing ground against its major currencies, outperforming North American currencies on Monday. The British currency is holding steady after rising sharply on Friday, helped by mighty preliminary UK (UK) S&P Global Purchasing Managers’ Index (PMI) data for January and upbeat retail sales data for December.
Data published on Friday showed that private business activity in the UK expanded at a faster pace thanks to mighty manufacturing and services PMI. The UK Composite PMI was 53.9 in January, higher than the estimate of 51.7 and the previous release of 51.4.
Meanwhile, the Office for National Statistics (ONS) reported that retail sales returned to growth in December after falling in the previous two months. Retail sales increased by 0.4%, although they were expected to decline again by 0.1%.
The UK economic calendar will be dazzling this week; therefore, market sentiment and speculation ahead of the Bank of England’s (BoE) monetary policy meeting in February will be key factors influencing the sterling exchange rate.
At its December policy meeting, the BoE said monetary policy would remain on a “gradual downward path.” Meanwhile, BoE Monetary Policy Committee (MPC) member Megan Greene said on Friday that the British central bank should avoid cutting interest rates, as should the Federal Reserve, citing expectations of wage growth.
“I will be watching household and business inflation expectations over the next few months to see if they decline in line with the lower inflation results. What I think is even more concerning are future wage growth rates,” Greene said, according to Reuters.
Today’s price of sterling
The table below shows the current percentage change of the British Pound (GBP) against the major listed currencies. The British pound was strongest against the US dollar.
| USD | EUR | GBP | JPY | BOOR | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.33% | -0.24% | -1.43% | -0.13% | -0.38% | -0.39% | -0.60% | |
| EUR | 0.33% | 0.09% | -1.13% | 0.21% | -0.06% | -0.07% | -0.28% | |
| GBP | 0.24% | -0.09% | -1.20% | 0.11% | -0.15% | -0.16% | -0.37% | |
| JPY | 1.43% | 1.13% | 1.20% | 1.34% | 1.07% | 1.07% | 0.85% | |
| BOOR | 0.13% | -0.21% | -0.11% | -1.34% | -0.26% | -0.26% | -0.48% | |
| AUD | 0.38% | 0.06% | 0.15% | -1.07% | 0.26% | -0.00% | -0.20% | |
| NZD | 0.39% | 0.07% | 0.16% | -1.07% | 0.26% | 0.00% | -0.20% | |
| CHF | 0.60% | 0.28% | 0.37% | -0.85% | 0.48% | 0.20% | 0.20% |
The heat map shows the percentage changes of the major currencies relative to each other. The base currency is selected from the left column and the quote currency from the top row. For example, if you select British Pound from the left column and move along the horizontal line to US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Market overview: Investors are waiting for the outcome of the Fed’s monetary policy
- During European trading hours on Monday, sterling is trading slightly higher against the US dollar. GBP/USD is gaining as the US dollar performs weaker across the board, with the US Dollar Index (DXY) trading 0.3% lower near 97.15 at the time of writing. A slight enhance in GBP/USD at times when the US dollar falls sharply means that sterling is also faint.
- The US dollar is under massive selling pressure on hopes that the White House may announce the name of the next Fed chairman this week. President of the United States (US) Donald Trump announced in December that he would announce the name of Fed Chairman Jerome Powell’s successor in January.
- According to recent comments from White House officials, the main contenders to replace Powell include National Economic Council Director Kevin Hassett, BlackRock CEO Rick Rieder, current Fed chairs Christopher Waller and Michelle Bowman, and former Fed Governor Kevin Warsh.
- Investors fear that the Fed will lose its independence after Trump’s nomination as Fed chairman. In the past, Trump has criticized Powell for not lowering interest rates and has also levied criminal charges for renovation cost overruns. Therefore, it can be expected that the decisions made by the up-to-date chairman will be biased towards Trump’s economic agenda.
- This week, investors’ attention will also focus on Wednesday’s announcement of the Fed’s monetary policy. According to CME’s FedWatch tool, the Fed is expected to announce a pause after three consecutive interest rate cuts. At its last three policy meetings in 2025, the Fed cut interest rates by 75 basis points (bps) to a range of 3.50-3.75%, citing labor market risks.
- During Monday’s session, investors will focus on US robust goods orders data for November, which will be released at 1:30 p.m. GMT.
Technical Analysis: GBP/USD Holds Well Above the 20-Day EMA
At the time of writing, the GBP/USD rate is rising and is around 1.3670. Price action remains well above the rising 20-day exponential moving average (EMA), which has risen to 1.3474 and forms the basis of the bullish structure. The average has increased in recent sessions, strengthening the positive trend bias. The relative strength index (RSI) at 71.11 (overbought) signals increased momentum and warns against the possibility of consolidation.
Above the 20-day EMA, corrections may remain circumscribed and the uptrend may extend. A drop in the RSI back below 70 would indicate cooling momentum and enhance the risk of a break.
(The technical analysis for this story was written with the support of an AI tool.)
Economic indicator
Fed’s interest rate decision
The Federal Reserve (The Fed) deliberates on monetary policy and decides on interest rates at eight previously scheduled meetings per year. It has two tasks: to keep inflation at 2% and to maintain full employment. Its main tool for achieving this goal is setting interest rates – both those at which it lends to banks and those at which banks lend to each other. If it decides to enhance interest rates, the US dollar (USD) will strengthen as it attracts a greater inflow of foreign capital. If it cuts interest rates, it will typically weaken the dollar as capital flows to countries offering higher yields. If rates remain unchanged, attention will focus on the tone of the Federal Open Market Committee (FOMC) announcement and whether it will be hawkish (expecting higher interest rates in the future) or dovish (expecting lower interest rates in the future).
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Next release:
Wed 28 Jan 2026 19:00
Frequency:
Irregular
Agreement:
3.75%
Previous:
3.75%
Source:
Federal Reserve
