GBP/USD trades at a four-week low near 1.3200s as a hawkish Fed outlook boosts the USD, while technical indicators show an RSI of 26 ahead of the UK GDP release.
Cable has broken below 1.3300 and the 61.8% Fibonacci retracement, trading at a fresh four-week low in the mid-1.3200s. Hotter-than-expected US inflation on Tuesday plus hawkish Fed commentary have markets pricing a possible 50 bps hike at the December FOMC, lifting the dollar to its highest since April 2025. The BoE's hawkish stance and upcoming UK GDP could limit losses, while RSI near 26 hints at stretched downside conditions.
Hotter-than-expected US consumer inflation released Tuesday, followed by hawkish comments from several Fed officials, has traders betting on an imminent rate hike and even pricing a jumbo 50 bps increase at the December FOMC. Middle East uncertainties add to safe-haven demand. The dollar has risen to its highest level since April 2025, though a strong UK GDP print or BoE pushback could trim gains.
The GBP/USD pair dropped to a four-week low in the mid-1.3200s as the US Dollar surged to its highest level since April 2025. Markets are pricing in a potential 50 bps rate hike at the December FOMC meeting following hotter-than-expected US inflation data. Traders now await the UK GDP report, with consensus at 0.7% QoQ, to determine the next directional move.
Hotter-than-expected US inflation and hawkish Fed comments have traders pricing a possible 50 basis-point rate hike at the December FOMC, pushing the dollar to its highest level since April 2025 and dragging the pair to a four-week low.
The analysis targets the 78.6% Fibonacci retracement at 1.3216, with the structural floor at the recent cycle low near 1.3138, though an oversold RSI near 26 warns the downside may be stretched.
Hotter-than-expected US consumer inflation on Tuesday and hawkish comments from several Fed officials have markets betting on an imminent rate hike, with some pricing a jumbo 50 basis-point increase at the December FOMC, lifting the dollar to its highest level since April 2025.