Last Updated on 15/09/2026
- GBP/USD trades slightly lower around 1.3490 during Tuesday’s Asian session.
- Markets increasingly expect the Federal Reserve to deliver a 25-basis-point rate increase on Wednesday.
- Investors await key UK labor market data and the Bank of England’s policy decision later this week.
Fundamental Analysis
The British Pound weakens modestly against the US Dollar on Tuesday, with GBP/USD hovering near 1.3490 during Asian trading. The Greenback remains supported by growing expectations that the Federal Reserve will raise interest rates at its upcoming policy meeting, while traders also prepare for a series of important UK economic releases.
Stronger-than-expected US inflation data released last week reinforced the view that the Fed may need to tighten monetary policy further. Core consumer prices increased by 0.3% in August, exceeding market forecasts and strengthening confidence that policymakers will act to contain persistent inflation pressures.
According to the CME FedWatch Tool, the probability of a September rate hike has climbed above 92%, a significant increase from roughly 67% before the latest inflation figures were published. Investors will closely monitor comments from Fed Chair Kevin Warsh following Wednesday’s FOMC decision. Any indications of a softer policy stance could weigh on the US Dollar, while a more hawkish tone may provide additional support.
In the United Kingdom, attention is focused on this week’s economic calendar, which includes employment figures, inflation data and retail sales. The Bank of England is widely expected to leave interest rates unchanged at 3.75% on Thursday, although market participants have recently increased expectations for a future rate increase amid rising energy costs.
BoE Governor Andrew Bailey recently stated that policymakers have no predetermined plan to raise rates this year unless higher oil prices begin generating more persistent domestic inflation. Nevertheless, financial markets have started assigning a higher probability to additional tightening later in the year.
Analysts note that widening UK-US yield differentials have generally favored Sterling in recent months. While political developments remain relatively muted, investors are also monitoring the UK government’s autumn budget announcement scheduled for late October.
Technical Outlook
GBP/USD continues to display a neutral short-term bias. The pair remains trapped between resistance near the middle Bollinger Band around 1.3557 and support in the 1.3455–1.3445 region, where the lower Bollinger Band converges with the 100-day moving average.
A sustained break above 1.3557 could open the door toward the upper Bollinger Band near 1.3660. Conversely, a move below the 1.3455–1.3445 support zone may increase bearish pressure and shift momentum in favor of sellers.
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