British Pound hovers around 1.34 as BoE hike bets outshine Fed doubts

• GBP/USD edges higher toward 1.3400 as Sterling buyers remain resilient.
• November BoE hike fully priced, potentially eliminating US-UK rate differential.
• December Fed hike odds fall to 70% despite strong GDP and inflation.

The Pound Sterling drifts higher against the US Dollar by 0.04% as traders seem confident that the Bank of England (BoE) will raise rates next week, while traders trim hawkish bets on the Fed despite solid US data released on Thursday. The GBP/USD trades near 1.3400.

GBP/USD remains supported as November BoE tightening expectations contrast with fading December Fed hike bets

US data revealed that the economy grew at a healthy 3.4% YoY in Q3, crushing forecasts. Consequently, inflation remains high at 3.1% YoY, as measured by the Core PCE, up from September’s print but in line with estimates. Even though this would increase the odds for a rate hike by the Fed, investors are trimming the odds from around 84% on Wednesday, post-Fed’s decision, to 70%, reveals Prime Terminal.

Of note, US equities – particularly tech stocks – are getting smashed, with the Nasdaq falling over 3% after tech stocks reported “disappointing tech earnings”, as read by a Bloomberg article.

In the UK, the budget was well received by investors. John Healey, the Finance Minister, presented the first budget of PM Andy Burnham administration, which was aligned with former Chancellor Reeves' fiscal rules.

Aside from this, the Bank of England is expected to raise the Bank Rate to 4%. The swaps market priced in a 100% chance, and if the BoE confirms the speculation, GBP/USD is poised to recover more ground, as the interest rate differential between the US and the UK would shrink to 0.

What’s in the calendar for the next week

Next week, the US economic docket will be packed. The ISM Manufacturing and Services PMI for October are eyed, along with a tranche of jobs data. Stats about the labour market include JOLTS, the ADP Employment Change, Initial Jobless Claims, and the highlight of the week, Nonfarm Payrolls.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3392. The pair holds a mildly bullish near‑term tone as it stands above the triple simple moving average cluster around 1.3380, suggesting underlying demand after reclaiming the 1.3251 former resistance trend line, now acting as structural support. Price is testing a downward trendline of resistance that breaks near 1.3391, while the Relative Strength Index (14) at 56.7 keeps momentum in constructive territory without yet signalling overbought conditions.

On the topside, a decisive move through the nearby trend‑line pivot at 1.3391 would expose higher resistance layers at the upward support‑turned‑resistance lines around 1.3656 and 1.3833. On the downside, initial support is seen at the 1.3392 area, followed by the triple simple moving average at 1.3380 and the reclaimed downward trend line around 1.3251, where a break lower would weaken the current bullish bias and open the door to a deeper corrective slide.

(The technical analysis of this story was written with the help of an AI tool. Know more.)