The British pound (GBP) is down 0.31% in the North American session as the US dollar (USD) rises, helped by a keen rise in US Treasury yields as investors price in a spike in inflation caused by the energy shock. GBP/USD is trading at 1.3392 after hitting an intraday high of 1.3437.
GBP/USD falls as inflation concerns lift US dollar and yields
Geopolitical issues and their impact drive financial markets. High energy prices caused by the war in Iran prompted investors to raise risk premiums in the bond market, with 10-year US Treasuries hitting a 16-month high of 4.687% as investors priced in a Federal Reserve (Fed) interest rate hike at the end of the year.
US crude oil benchmark West Texas Intermediate (WTI) rose 0.79% to $103.29 a barrel even as US President Donald Trump remains hopeful about reaching an agreement with Tehran. On Monday, he posted that he would not continue Tuesday’s attack on Iran because his allies were pushing for a deal.
Nevertheless, Iran’s proposal remained unchanged from its previous offer in which it delayed discussions on uranium enrichment.
There was no U.S. economic report, and investors were anxiously awaiting the release of minutes from the Fed’s last monetary policy meeting, chaired by outgoing Chairman Jerome Powell. On Friday, Kevin Warsh will be sworn in as the modern head of the US central bank.
In the UK, payroll data showed that employment fell by 100,000 from March to April, while the previous months were revised downwards. The unemployment rate increased from 4.9% to 5%.
Political turmoil in Britain is putting pressure on Sterling as Prime Minister Keir Starmer fights to retain the leadership of the Labor Party. The Mayor of Greater Manchester, Andy Burnham, is running for a seat in Parliament to challenge Starmer.
This week, the British economic report will include April inflation data, which is expected to drop from 3.1% to 2.6% y/y.
GBP/USD Price Forecast: Technical Outlook
On the daily chart, GBP/USD is trading at 1.3394, holding slightly below the cluster of uncomplicated moving averages (SMAs) near 1.3429 that are currently capping the upside and maintaining a short-term bearish bias. The price is also testing a downward resistance trendline, suggesting that gains remain feeble, while the Relative Strength Index (RSI) at 43.6 is leaning towards delicate momentum rather than oversold conditions, suggesting that sellers will continue to hold the upper hand unless the pair is able to reclaim the overall averages.
Upside, immediate resistance lies at the coalescing 50-day, 100-day and 200-day SMAs centered around 1.3429, where any intraday close above would ease current downside pressure and open the door to a broader recovery attempt. On the other hand, the lack of clearly defined nearby support levels based on the indicators provided means that a failure to hold the 1.3390 area could see GBP/USD fall further towards earlier lows on the chart, leaving short-term risks biased towards further weakness while it remains capped below the moving average cluster.
(The technical analysis for this story was written with the lend a hand of an AI tool.)
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 Australian dollar.
| USD | EUR | GBP | JPY | BOOR | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.51% | 0.27% | 0.18% | 0.17% | 1.08% | 0.79% | 0.69% | |
| EUR | -0.51% | -0.24% | -0.33% | -0.33% | 0.59% | 0.30% | 0.19% | |
| GBP | -0.27% | 0.24% | -0.09% | -0.11% | 0.80% | 0.55% | 0.43% | |
| JPY | -0.18% | 0.33% | 0.09% | -0.02% | 0.88% | 0.62% | 0.50% | |
| BOOR | -0.17% | 0.33% | 0.11% | 0.02% | 0.90% | 0.62% | 0.52% | |
| AUD | -1.08% | -0.59% | -0.80% | -0.88% | -0.90% | -0.26% | -0.38% | |
| NZD | -0.79% | -0.30% | -0.55% | -0.62% | -0.62% | 0.26% | -0.11% | |
| CHF | -0.69% | -0.19% | -0.43% | -0.50% | -0.52% | 0.38% | 0.11% |
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).
