GBP/USD Rises as BOE Hike Bets Meet Softer U.S. Dollar

GBP/USD traded higher on Friday with the British Pound near 1.3330 and on track for a solid weekly gain. Sterling has been helped by August U.K. GDP unexpectedly rising 0.1%, reinforcing the idea that the economy can absorb tighter monetary policy better than feared. Governor Andrew Bailey also said second-round inflation effects from the energy shock remain subdued so far, but markets still expect a 25-bps BOE hike at the November meeting as headline inflation stays above target. 

The U.S. side has provided the second leg of the move. The 10-year Treasury yield has pulled back sharply from its recent 5.36% peak as investors rotate into bonds amid renewed concerns around leveraged AI investment, cooling the U.S. Dollar’s yield advantage. That leaves GBP/USD supported by a cleaner relative-rates setup for now, though the October 28 U.K. budget remains the next major risk event as Gilt investors test Finance Minister John Healey’s commitment to fiscal discipline. 

GBP/USD Daily Price History

GBP/USD just staged a pretty violent rejection of the 1.3160 floor. Price briefly broke beneath that level, snapped back immediately, and has now pushed into the mid-1.33s. That is constructive in the very short run because it looks like a failed breakdown rather than a clean continuation lower. Momentum has improved quickly. MACD has crossed higher, the histogram has flipped positive, and downside momentum is clearly fading. Stochastics have already surged back near 80, so the rebound is getting stretched before price has cleared the major moving-average resistance overhead. GBP/USD remains below the 50-, 100-, and 200-day moving averages, all clustered around roughly 1.3370-1.3410, the midpoint of the trading range since the start of the year. A move above that band would put focus on range resistance above 1.3600 over the coming weeks.

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