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GBP/USD holds near July lows as Fed outlook stays firmer

The dollar firmed to a nearly two week high as bets for another Federal Reserve rate hike rose after S&P Global data showed US activity accelerating for a fourth straight month in September.

Reported · Written up by our desk · Major Pairs

GBP/USD kept a mildly negative tone for a fourth straight day in Thursday trading, holding around the 1.3230 to 1.3225 area and near its lowest level since early July, FXStreet said.

FXStreet attributed the weaker sterling to interest rate divergence, with the US Dollar supported by firming expectations for another Federal Reserve rate hike. The outlook was reinforced by S&P Global reporting that US business activity accelerated for a fourth consecutive month in September, posting the fastest growth pace since July 2021.

FXStreet also pointed to the pound’s struggle to attract buyers, citing the Bank of England’s more cautious stance and a gradual easing bias amid stagflation fears. A mixed UK business activity report released Wednesday contributed to GBP bulls staying on the sidelines.

On the technical side, the pair remained bearish below the 100 day simple moving average and fell further below the 78.6% Fibonacci retracement level, with support seen at 1.3139 and resistance clustered near 1.3254 and 1.3344. FXStreet noted that sentiment may be influenced by a crucial meeting between US President Donald Trump and his Chinese counterpart Xi Jinping.

Latest closeGBP/USD 1.323 ▼0.8%

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