Select Language

GBP/USD rises above 1.3450 on rising odds of further Fed rate cuts

Breaking news

GBP/USD rises above 1.3450 on rising odds of further Fed rate cuts

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2025.10.01 14:23
GBP/USD rises above 1.3450 on rising odds of further Fed rate cuts

update 2025.10.01 14:23

  • GBP/USD gains ground as the US Dollar weakens due to the increasing likelihood of more Fed rate cuts in 2025.
  • The CME FedWatch Tool indicates the pricing in a 97% chance of a Fed rate cut in October.
  • The Pound Sterling gains ground as the UK economy rose in the second quarter.

GBP/USD extends its winning streak for the fourth successive session, trading around 1.3460 during the Asian hours on Wednesday. The pair may further appreciate as the US Dollar (USD) faces challenges after soft US jobs data increased the odds of Federal Reserve (Fed) rate cuts. The CME FedWatch Tool suggests that markets are now pricing in nearly a 97% chance of a Fed rate cut in October and a 76% possibility of another reduction in December.

The recent US Job Openings showed the labor market is slowing, yet vacancies rose from 7.21 million to 7.23 million in August. Meanwhile, the hiring rate edged down to 3.2%, the lowest level since June 2024, while layoffs remained at a low level. Traders are likely to await the release of September's US ADP Employment Change and ISM Manufacturing PMI data, which could be affected due to the government shutdown.

The US government has shut down, with around 750,000 federal employees facing furloughs after Congress failed to pass funding bills. The US Labor Department said Monday that its statistics agency would suspend data releases, including Friday's closely watched monthly jobs report, if a partial shutdown occurs.

The GBP/USD pair gained ground as the Pound Sterling (GBP) received support after the stronger United Kingdom (UK) Gross Domestic Product (GDP) data for the second quarter was released on Tuesday. The figures showed that the UK economy rose by 1.4% YoY, faster than the preliminary release of 1.2%. Quarter-on-quarter GDP growth remained in line with flash estimates of 0.3%.

However, the British pound could come under pressure as Bank of England (BoE) Deputy Governor Dave Ramsden has advocated for a rate cut amid mounting concerns in the UK labor market. Ramsden also expressed confidence that inflationary pressures will ease, noting that current interest rates remain restrictive.

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.


Date

Created

 : 2025.10.01

Update

Last updated

 : 2025.10.01

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

WTI Price Forecast: Crude Oil challenges 50-day SMA as US sanctions spark fresh rally

West Texas Intermediate (WTI) surges on Thursday, extending its rally for the third consecutive day after the United States (US) imposes sanctions on Russian energy majors Rosneft and Lukoil, stoking supply concerns.
New
update2025.10.24 03:49

Dow Jones Industrial Average pares losses on Thursday as markets stop the slide

The Dow Jones Industrial Average (DJIA) found slim gains on Thursday, climbing around 150 points and clawing back some of the losses that pummeled the major equity index the previous session.
New
update2025.10.24 03:22

FX Today: Markets brace for PMIs and US CPI double feature

The US Dollar (USD) remained fairly bid in the upper end of its weekly range, while investors kept the prudence intact ahead of the release of US CPI prints. Meanwhile, US-China trade concerns kept doing the rounds alongside the utter absence of news surrounding the US federeal government shutdown.
New
update2025.10.24 03:06

US Press Secretary Leavitt: A meeting with Putin is not completely off the table

White House Press Secretary Karoline Leavitt spoke today in the James S. Brady Press Briefing Room at the White House. She said that the United States (US) President Trump is exercising constitutional power on clemency, and she also said that Russia has shown not enough interest in peace.
New
update2025.10.24 03:04

USD/JPY gains momentum ahead of twin inflation releases from Japan and the United States

The Japanese Yen (JPY) continues to slide against the US Dollar (USD) on Thursday, with USD/JPY extending its advance for the fifth consecutive day.
New
update2025.10.24 02:54

Gold bounces above $4,100 as buyers step in ahead of US CPI

Gold price recovers some ground on Thursday after posting back-to-back bearish daily candles, courtesy of traders booking profits ahead of the release of September's US inflation report, along with a slight tempering of US President Donald Trump's trade rhetoric on China.
New
update2025.10.24 02:41

USD/CHF edges lower as SNB rules out negative interest rates

USD/CHF eases slightly on Thursday after reaching an intraday high of 0.7987, trading around 0.7950 at the time of writing.
New
update2025.10.24 01:53

AUD/USD gains on commodity strength as US inflation data, Fed rate cut eyed

AUD/USD appreciates 0.40% on Thursday, trading around 0.6510 at the time of writing, buoyed by a renewed appetite for commodity-linked currencies, while investors remain cautious ahead of the release of the September US inflation report, due on Friday.
New
update2025.10.24 00:40

USD/CAD steadies as stronger US Dollar offsets support from rising oil prices

The Canadian Dollar (CAD) steadies against the US Dollar (USD) on Thursday, with USD/CAD advancing modestly after two consecutive days of declines.
New
update2025.10.24 00:30

GBP/USD slips as softer UK inflation boosts BoE dovish bets

The GBP/USD retreats on Thursday, down over 0.21% after the latest inflation report in the United Kingdom, increased the odds for a Bank of England rate cut by the end of the year. At the time of writing, the pair trades at 1.3326 after reaching a high of 1.3359.
New
update2025.10.24 00:24

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