British Pound slips as Oil spike revives inflation fears
- WTI jumps above $80 as Iran retaliation risks intensify.
- UoM sentiment improves, while inflation expectations ease modestly.
- Burnham transition and UK data shape Sterling’s next move.
The Pound Sterling retreats during the North American session, down 0.22% against the Greenback, as geopolitical tensions remained high, triggering a jump in Oil prices and heightening fears of a reacceleration of inflation. The GBP/USD trades at 1.3449 after peaking near 1.3480.
GBP/USD eases as Middle East tensions lift Dollar demand
Hostilities in the Middle East continued with the US attacking Iranian infrastructure, according to Iran’s army spokesperson, who warned that attacks on Oil facilities could trigger retaliation, saying that “either all countries in the region can export oil or no one can.” As tensions rose, Oil prices jumped, with WTI, the US crude Oil benchmark, gaining over 1.50% to $80.78 per barrel.
US economic data revealed that Consumer Sentiment improved due to the dip in gasoline prices at the pump, according to the University of Michigan (UoM): The survey revealed that the index rose from 50.7 to 54 in July. Meanwhile, inflation expectations for one year dipped from 4.6% in June to 4.2%, and for five years, were steady at 3.3%.
Meanwhile, expectations that the Federal Reserve (Fed) would tighten monetary policy had tempered, following US inflation data on the consumer and producer side. Both readings showed a modest cooldown, but Iran’s war escalation has kept WTI up 13% so far this month.
Money markets had priced in a nearly 61% chance of a Fed rate hike at the October 28 meeting, according to Prime Terminal data. For the July meeting, the central bank is expected to hold rates unchanged, with odds standing at 76%.
In the UK, Andy Burnham is set to become the new Prime Minister next week. Rumours that he would pick Shabana Mahmood as the Chancellor of the Exchequer were cheered by investors, as the Pound holds onto weekly gains of 0.4%.
Next week, US & UK data
The UK economic schedule will feature the coronation of PM Andy Burnham, the release of employment and inflation data, along with Retail Sales. Across the pond, the US economic docket will feature jobs data and S&P Global Flash PMIs, as Federal Reserve officials entered their blackout period ahead of the July 29 policy meeting.
GBP/USD Price Forecast: Technical outlook
In the daily chart, GBP/USD trades at 1.3451, with a mildly bullish near‑term bias as spot holds above the latest reading of the simple moving average triple at 1.3381. The pair is advancing within the broader structure, but remains capped by a descending resistance trend line coming in around 1.3487, while the former upward support trend line has turned into an additional barrier near 1.3498. A constructive tone is supported by the Relative Strength Index (14) hovering around 56.9, hinting at steady buying interest rather than overbought conditions.
On the topside, initial resistance is located at the downward trend‑line break price at 1.3487, followed by the overhead former support trend line near 1.3498, where a daily close above would open the door to a more decisive continuation of the recovery. On the downside, immediate support is seen at the 1.3451 area, with stronger underlying demand aligning with the simple moving average triple around 1.3381; a slide back through this latter zone would suggest the bullish bias is fading and expose the pair to deeper corrective pressure.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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 Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.32% | -0.47% | 0.44% | -1.06% | -0.56% | -1.45% | -0.07% | |
| EUR | 0.32% | -0.16% | 0.78% | -0.75% | -0.29% | -1.14% | 0.26% | |
| GBP | 0.47% | 0.16% | 0.87% | -0.58% | -0.13% | -0.98% | 0.46% | |
| JPY | -0.44% | -0.78% | -0.87% | -1.57% | -1.00% | -1.92% | -0.56% | |
| CAD | 1.06% | 0.75% | 0.58% | 1.57% | 0.58% | -0.36% | 1.05% | |
| AUD | 0.56% | 0.29% | 0.13% | 1.00% | -0.58% | -0.85% | 0.46% | |
| NZD | 1.45% | 1.14% | 0.98% | 1.92% | 0.36% | 0.85% | 1.46% | |
| CHF | 0.07% | -0.26% | -0.46% | 0.56% | -1.05% | -0.46% | -1.46% |
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).
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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.
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