British Pound tumbles as Warsh revives Fed hike bets
- GBP/USD tumbles as Warsh puts inflation fight first.
- Fed hike odds rise as September tightening risk returns.
- Jobs revisions and sentiment data fail to weaken Dollar.
The Pound Sterling tumbles versus the Greenback on Friday as the Federal Reserve Chair Kevin Warsh puts inflation as the priority on the Fed, increasing the likelihood of an interest rate hike later in the year. The GB/USD trades at 1.3538, down 0.40%.
GBP/USD slides as Warsh keeps Fed’s inflation focus firmly intact
Finally, Warsh revealed his current stance, despite skipping putting his dot in June’s dol-plot at the Summary of Economic Projections (SEP). He said that summer’s inflation data was better than expected, but recognised that core inflation hasn’t improved, as he expected. He added that the Fed must be confident that inflation is returning to target, or otherwise, “we have work to do.”
Warsh acknowledged that consumer spending is healthy and the labour market is stable. But regarding price stability, he said that numbers are “more concerning,” and reaffirmed that the “Fed 2% PCE target is firm and fixed.”
After the data, the US Dollar Index (DXY), which tracks the performance of the buck against six currencies, climbs over 0.38% at 99.49. US Treasury yields, particularly the 10-year benchmark rate, are up nearly 1.5 basis points to 4.686%, while investors have increased the chances of a rate hike at the September meeting.
Prime Terminal's interest rate probability tool shows that money markets increased the odds of a 25-basis-point Fed rate hike from 34% a day ago to 43% as of writing. Nevertheless, over Warsh’s remarks, the odds were as high as 50%.
Aside from this, the Nonfarm Payrolls Annual Revision came at -79K, below forecasts of 183K, improving from the previous revision of -911K. The final benchmark revision will be issued in February 2027 with the publication of the January 2027 Employment Situation news release.
The University of Michigan (UoM) Consumer Sentiment in August was 51.7, above estimates for a 51 print, but deteriorated compared to July’s print. Inflation expectations were modestly revised downward for one year, from 4.2% to 4%, while five-year expectations remained steady at 3.3%, in line with forecasts.
Given the backdrop, Cable resumed its downtrend as the UK economic schedule remained absent, with the US Dollar and geopolitics driving the move.
Next week the UK economic docket will feature the BoE Monetary Policy Report Hearings, as well as a speech by BoE Governor Bailey. IN the US, the schedule is slammed, with ISM PMIs, and a flurry of jobs data, led by the release of August’s Nonfarm Payrolls.
GBP/USD Price Forecast: Technical outlook
In the daily chart, GBP/USD trades at 1.3572, holding a constructive bullish bias as spot remains above the cluster of reclaimed supports around the mid-1.34s. The triple simple moving average around 1.3424 now underpins the advance together with former trend-line barriers turned support near 1.3487, 1.3397 and 1.3392, while a mildly positive 14-day Relative Strength Index around 57 suggests buyers retain control without yet venturing into overbought territory.
On the topside, initial resistance is seen at the former rising trend-line break around 1.3634, and a daily close above this level would open the way for a more decisive continuation higher. On the downside, any pullback is likely to find first demand near 1.3487, ahead of the 1.3424 triple simple moving average region, with deeper support aligning at 1.3397 and 1.3392, where the prior trend lines now reinforce the broader bullish structure.
(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 Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.50% | 0.43% | 0.64% | 0.52% | -0.30% | 0.65% | 0.66% | |
| EUR | -0.50% | -0.06% | 0.04% | 0.02% | -0.79% | 0.14% | 0.16% | |
| GBP | -0.43% | 0.06% | 0.02% | 0.09% | -0.72% | 0.21% | 0.23% | |
| JPY | -0.64% | -0.04% | -0.02% | -0.06% | -0.86% | 0.10% | 0.10% | |
| CAD | -0.52% | -0.02% | -0.09% | 0.06% | -0.77% | 0.16% | 0.15% | |
| AUD | 0.30% | 0.79% | 0.72% | 0.86% | 0.77% | 0.94% | 0.95% | |
| NZD | -0.65% | -0.14% | -0.21% | -0.10% | -0.16% | -0.94% | 0.02% | |
| CHF | -0.66% | -0.16% | -0.23% | -0.10% | -0.15% | -0.95% | -0.02% |
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).
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
