Select Language

GBP/USD opens the door to a visit to 1.3600

Breaking news

GBP/USD opens the door to a visit to 1.3600

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
update 2025.09.01 21:58
GBP/USD opens the door to a visit to 1.3600

update 2025.09.01 21:58

  • GBP/USD adds to the recent recovery past the 1.3500 level.
  • The US Dollar starts the week on the back foot, falling to multi-week lows.
  • US markets are closed on Monday due to the Labor Day holiday.

The British Pound rapidly shrugs off Friday's hiccup and manages to regain composure on Monday, lifting GBP/USD past 1.3500 the figure in a context dominated by the widespread selling bias in the Greenback.

GBP/USD focuses on 1.3600

The resurgence of the buying interest in Cable comes in response to extra weakness in the Greenback, which drags the US Dollar Index (DXY) to levels last seen in late July, below the 98.00 support.

Meanwhile, investors are expected to gear up for quite an interesting week on the US calendar, where the US labour market is expected to take centre stage amid steady speculation of a couple of interest rate cuts by the Federal Reserve in the latter part of the year.

Domestically, investors largely anticipate the BoE to leave its policy rate unchanged at its September 18 gathering, while implied rates see nearly 25 basis points of easing by March 2026.

In the meantime, market participants should maintain their watchful stance on the UK fiscal scenario, while Treasury Committee members will meet the BoE's rate-setters later this week, hoping to pick up clues on when cuts might come or whether there could be tweaks to the bank's quantitative tightening plans.

Whats on the UK calendar

Across the Channel, Nationwide Housing Prices contracted by 0.1% in August, Mortgage Approvals rose to 65.35K in July, and the BoE's M4 Money Supply expanded by 0.1% in July from a month earlier.

Technical landscape

If GBP/USD breaks above the August high at 1.3594 (August 14), it could clear the path toward the 2025 ceiling at 1.3788 (July 1). Beyond that, the next resistance is the October 2021 peak at 1.3834 (October 20). 

On the flip side, first support comes in at the weekly low of 1.3390 (August 22), followed by the August floor at 1.3141 (August 1) and the May base at 1.3139 (May 12) just below.

UK gilt yields FAQs

UK Gilt Yields measure the annual return an investor can expect from holding UK government bonds, or Gilts. Like other bonds, Gilts pay interest to holders at regular intervals, the 'coupon', followed by the full value of the bond at maturity. The coupon is fixed but the Yield varies as it takes into account changes in the bond's price. For example, a Gilt worth 100 Pounds Sterling might have a coupon of 5.0%. If the Gilt's price were to fall to 98 Pounds, the coupon would still be 5.0%, but the Gilt Yield would rise to 5.102% to reflect the decline in price.

Many factors influence Gilt yields, but the main ones are interest rates, the strength of the British economy, the liquidity of the bond market and the value of the Pound Sterling. Rising inflation will generally weaken Gilt prices and lead to higher Gilt yields because Gilts are long-term investments susceptible to inflation, which erodes their value. Higher interest rates impact existing Gilt yields because newly-issued Gilts will carry a higher, more attractive coupon. Liquidity can be a risk when there is a lack of buyers or sellers due to panic or preference for riskier assets.

Probably the most important factor influencing the level of Gilt yields is interest rates. These are set by the Bank of England (BoE) to ensure price stability. Higher interest rates will raise yields and lower the price of Gilts because new Gilts issued will bear a higher, more attractive coupon, reducing demand for older Gilts, which will see a corresponding decline in price.

Inflation is a key factor affecting Gilt yields as it impacts the value of the principal received by the holder at the end of the term, as well as the relative value of the repayments. Higher inflation deteriorates the value of Gilts over time, reflected in a higher yield (lower price). The opposite is true of lower inflation. In rare cases of deflation, a Gilt may rise in price - represented by a negative yield.

Foreign holders of Gilts are exposed to exchange-rate risk since Gilts are denominated in Pound Sterling. If the currency strengthens investors will realize a higher return and vice versa if it weakens. In addition, Gilt yields are highly correlated to the Pound Sterling. This is because yields are a reflection of interest rates and interest rate expectations, a key driver of Pound Sterling. Higher interest rates, raise the coupon on newly-issued Gilts, attracting more global investors. Since they are priced in Pounds, this increases demand for Pound Sterling.


Date

Created

 : 2025.09.01

Update

Last updated

 : 2025.09.01

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

PBOC sets USD/CNY reference rate at 7.1118 vs. 7.1077 previous

On Thursday, the People's Bank of China (PBOC) set the USD/CNY central rate for the trading session ahead at 7.1118 compared to the previous day's fix of 7.1077 and 7.1293 Reuters estimate.
New
update2025.09.25 10:15

Gold Price Forecast: XAU/USD drifts higher to near $3,750 amid rate cut bets, geopolitical risks

The Gold price (XAU/USD) trades in positive territory around $3,750 during the early Asian session on Thursday. The precious metal edges higher amid expectations of further US rate cuts from the Federal Reserve (Fed) this year and persistent geopolitical risks.
New
update2025.09.25 10:02

BoJ Minutes: To keep raising rates if economy, prices move in line with its forecast

The Bank of Japan (BoJ) board members shared their views on the monetary policy outlook on Thursday, per the BoJ Minutes of the July meeting.     
New
update2025.09.25 08:59

AUD/USD weakens below 0.6600 on Fed Powell's cautious rate outlook

The AUD/USD pair loses ground to near 0.6585 during the early Asian session on Thursday. The cautious rate outlook of the US Federal Reserve (Fed) Chair Jerome Powell provides some support to the US Dollar (USD) against the Australian Dollar (AUD).
New
update2025.09.25 08:38

GBP/USD flubs bullish recovery, falls back below key technical levels

GBP/USD fumbled a near-term bullish correction on Wednesday, slipping back below the 50-day Exponential Moving Average (EMA) near 1.3500 and snapping a two-day winning streak.
New
update2025.09.25 08:27

GBP/JPY Price Forecast: Surpasses 200.00 as soft Japan PMIs weigh on Yen

The GBP/JPY advances over 0.22% on Wednesday after the Japanese Yen weakened on softer Flash PMIs reported. At the time of writing, the cross-pair trades at 200.16 after hitting a daily low of 199.46.
New
update2025.09.25 08:10

USD/JPY rises above 148.50 ahead of BoJ Meeting Minutes

The USD/JPY pair rises to near 148.80 during the early Asian session on Thursday. The US Dollar (USD) strengthens to near its highest in three weeks against the Japanese Yen (JPY) due to a fresh round of risk aversion across the financial markets and a cautious tone from the US central bank. 
New
update2025.09.25 08:00

EUR/USD drops below 1.1750 as Powell's cautious tone lifts Dollar

EUR/USD tumbles on Wednesday edges down 0.66% as the Greenback recovers following Tuesday's Fed Chair Jerome Powell speech, in which he was cautious regarding rushing to reduce interest rates. The pair trades at 1.1738 after hitting a daily high of 1.1819.
New
update2025.09.25 07:35

Fed's Daly supports rate cuts, but warns rates can't fix policy issues

Federal Reserve (Fed) Bank San Francisco President Mary C. Daly noted on Wednesday that although she supports rate cuts, there is only so much that pressing interest rates down to neutral can accomplish on the stability front.
New
update2025.09.25 07:20

Fed's Goolsbee warns against series of rate cuts

Federal Reserve (Fed) Bank of Chicago President Austan Goolsbee broke away from the overarching narrative of consecutive Fed rate cuts heading through the end of the year, widening the narrative gap between Fed incumbents and Donald Trump's newly-minted Fed plant Stephen Miran.
New
update2025.09.25 04:31

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel