Pound Sterling Steadies After Fed Cut as Markets Await UK GDP Data

The Pound Sterling (GBP) is holding firm on Thursday, giving back only a small portion of its recent gains after the U.S. Federal Reserve delivered a widely anticipated 25 basis-point rate cut. Traders are now shifting their attention to a series of crucial U.K. economic releases that could influence next week’s Bank of England (BoE) interest-rate decision.

Key UK Data Releases in Focus Before the BoE Decision

Over the next several days, the Office for National Statistics (ONS) will release multiple high-impact reports, including:

• October GDP
• Labour market data for the three months ending October
• November inflation (CPI)

Friday’s GDP report is expected to show the economy grew by 0.1%, reversing the previous month’s slight contraction. A positive reading would strengthen confidence in the U.K.’s growth outlook at a time when the nation’s fiscal watchdog recently upgraded its 2024 GDP forecast from 1.0% to 1.5%.

The details inside the GDP figures will also matter. Both Manufacturing Production and Industrial Production are projected to rise on a monthly basis due to the impact of earlier lower readings.

BoE Expected to Cut Rates Next Week

Market expectations continue to build that the Bank of England will cut interest rates by 25 bps to 3.75% next week, especially as labour market softness persists. With unemployment rising and hiring activity slowing, investors believe policymakers may start easing sooner rather than later.

Market Movers: Fed Signals Goods Inflation May Peak in Early 2026

• GBP/USD is trading close to a seven-week high near 1.3400, supported by ongoing U.S. Dollar weakness.
• The U.S. Dollar Index (DXY) remains under pressure, hovering around 98.54, its lowest level since October.
• On Wednesday, the Federal Reserve cut rates to 3.50%–3.75% and indicated just one rate cut expected in 2026.
• The Dollar weakened further after the Fed lowered inflation projections and noted that goods inflation is likely to peak in Q1 2026, assuming no new tariffs are introduced.
• Despite these dovish elements, Fed Chair Jerome Powell warned that the threshold for additional rate cuts is high, suggesting a cautious approach.

Later today, investors will watch the release of U.S. Initial Jobless Claims, which are expected to rise to 220,000, up from last week’s 191,000.

GBP/USD outlook explained: This video breaks down Pound Sterling price action, Bank of England rate cut expectations, and how key UK economic releases could move markets.

Technical Analysis: GBP/USD Eyes 1.3470 Resistance

The Pound is trading firmly around 1.3370, and technical indicators continue to support the bullish bias:

• GBP/USD remains well above the 20-day Exponential Moving Average (EMA) at 1.3266, reinforcing upside momentum.
• The 14-day Relative Strength Index (RSI) sits at a healthy 63, signaling buyers remain in control.

If GBP/USD stays above the 20-day EMA, the pair could continue rising toward the next key resistance at 1.3470, the high from October 17.

A daily close below 1.3266 would weaken the bullish outlook and shift attention to support near 1.3100.

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