Sterling Slips as BOE Bets Build

GBP/USD dropped as much as half of one percent Tuesday as Sterling came under pressure from a widening policy contrast between the U.K. and the United States. Markets continue to reassess the U.K. growth outlook after a run of softer activity data and signs that labor market momentum is cooling, reinforcing the view that the Bank of England may have greater scope to cut rates in coming meetings. That softer domestic backdrop left the pound vulnerable, particularly as the U.S. Dollar found support from firmer Treasury yields and a still-resilient U.S. macro picture. Those firmer Treasury yields arose from the rally in oil, with Brent crude back above $100 per barrel.

GBP/USD Daily Price History

In the above chart, GBP/USD is sitting back at the uptrend of the January and November 2025 lows, reacting erratically to the recent spat of news regarding a potential ceasefire. Nevertheless, even with the pullback, GBP/USD remains above the series of ‘lower highs’ carved out in recent weeks near 1.3500. And, to the point of support being held, the pair’s daily 5-, 20-, 50-, and 100 EMAs (exponential moving average) remain in bullish sequential order. Bulls may be sweating a bit but bears have much more work to do before a technical change in the chart perspective is considered. 

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