GBP/USD slips as higher Oil, US yields boost the US Dollar
- GBP/USD falls to 1.3400 as rising US yields and firmer energy prices support the Greenback.
- UK business activity slows sharply, with input prices hitting highest levels since the 1992 Sterling crisis.
- Markets see no Fed cuts in 2026, while Middle East tensions keep inflation risks elevated.
The Pound Sterling falls by 0.16% on Tuesday as the Greenback advances, underpinned by a recovery in energy prices and rising US Treasury yields, as markets do not expect the Federal Reserve to cut rates in 2026. The GBP/USD trades at 1.3400 after hitting a daily high of 1.3445.
Pound eases after softer UK PMIs and rebounding energy prices reinforce Dollar demand
Tensions in the Middle East remain high, even though investors were relieved by the message of US President Donald Trump, delaying attacks on Iran's power plants and energy facilities. Although he said that discussions to end the war with the Iranian regime were productive, Iran's media disputed Trump's assumptions.
Nevertheless, the Iranian Foreign Minister Araghchi is said to have secretly informed the US envoy Witkoff that the Iranian Supreme Leader, Mojtaba Khamenei, had agreed to negotiate, as Al Arabiya reported, citing Israeli press sources.
Recently, the Iranian Foreign Minister revealed that the Strait of Hormuz is open, but countries at war with Iran are not considered. Earlier, newswires revealed that Iran is charging some ships for safe passage through the Strait of Hormuz.
Data from the US showed that business activity slowed to an 11-month low in March, sparked by a jump in input prices, S&P Global reported. The S&P Global Composite PMI dipped to 51.4 from 51.9 in February, weighed by the fall of the Services PMI, from 51.7 to 51.1
Manufacturing activity in the US improved sharply from 51.6 in February to 52.4, exceeding forecasts of 51.
Earlier, the jobs data, namely the ADP Employment 4-week average, came in at 10K.
In the UK, business activity slowed the most in six months in March, according to S&P Global. The Composite Flash PMI sank to 51.0 in March from 53.7 in February. The S&P Global Services PMI dipped from 53.9 to 51.2, while the manufacturing index slowed from 51.7 to 51.4.
The UK Flash PMI showed that manufacturing input prices reached their highest level since the 1992 Sterling crisis.
Pound Sterling Price This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.37% | -0.50% | -0.29% | 0.34% | 0.50% | 0.10% | 0.35% | |
| EUR | 0.37% | -0.12% | 0.11% | 0.73% | 0.87% | 0.49% | 0.73% | |
| GBP | 0.50% | 0.12% | 0.17% | 0.85% | 1.01% | 0.60% | 0.79% | |
| JPY | 0.29% | -0.11% | -0.17% | 0.59% | 0.77% | 0.34% | 0.53% | |
| CAD | -0.34% | -0.73% | -0.85% | -0.59% | 0.18% | -0.24% | -0.01% | |
| AUD | -0.50% | -0.87% | -1.01% | -0.77% | -0.18% | -0.40% | -0.22% | |
| NZD | -0.10% | -0.49% | -0.60% | -0.34% | 0.24% | 0.40% | 0.18% | |
| CHF | -0.35% | -0.73% | -0.79% | -0.53% | 0.00% | 0.22% | -0.18% |
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).
GBP/USD Price Forecast: Technical outlook
In the daily chart, GBP/USD trades at 1.3382. The near-term bias is mildly bearish as price slips below the clustered simple moving averages around 1.3500, turning that area into an overhead cap after acting as support through most of the recent range. The pair is also backing away from the descending resistance trend line from 1.3869, which has repeatedly contained rallies and reinforces the notion of fading tops near the mid-1.36s. While the long-running ascending support line from 1.3035 still underpins the broader advance, the latest pullback toward its vicinity signals waning upside momentum and leaves the cross vulnerable to a deeper correction if buyers fail to defend it.
Immediate resistance emerges at 1.3450, followed by the 1.3500 region where the downward-sloping resistance line converges with the moving average cluster, and then the recent highs near 1.3650. On the downside, initial support is seen close to the rising trend line from 1.3035, now coming in just above 1.3300, with a break exposing the late-November pivot around 1.3220 and then the psychological 1.3100 area. A daily close back above 1.3500 would relieve the current pressure and re-open the path toward 1.3650, while sustained trading below the trend line would confirm a transition into a more decisive bearish phase.
(The technical analysis of this story was written with the help of an AI tool.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Nothing in this material constitutes investment advice, personal recommendation, investment research, an offer, or a solicitation to buy or sell any financial instrument. The content has been prepared without consideration of your individual investment objectives, financial situation, or needs, and should not be treated as such.
Past performance is not a reliable indicator of future performance and/or results. Forward-looking scenarios or forecasts are not a guarantee of future performance. Actual results may differ materially from those anticipated.
Mitrade makes no representation or warranty as to the accuracy or completeness of the information provided and accepts no liability for any loss arising from reliance on such information.
Recommended Articles
