The Pound Sterling (GBP) continued to lose ground against the US Dollar (USD) for a fourth consecutive session on Friday, hovering near a fresh six-month low of 1.3116 reached on Thursday. The pair remains pressured as the Greenback benefits from receding expectations of further Federal Reserve rate cuts and optimism over a potential US–China trade deal.
At the time of writing, the US Dollar Index (DXY) — which measures the Greenback against six major peers — was holding firm near an almost three-month high of 99.70, reached on Thursday.
Fed’s Hawkish Stance Lifts the Dollar
The USD has strengthened across the board as traders trimmed bets on a December rate cut after Fed Chair Jerome Powell cautioned that another move lower was “far from assured.” Powell’s comments followed the Fed’s decision on Wednesday to lower interest rates by 25 basis points to the 3.75%–4.00% range — its second consecutive cut this year.
According to the CME FedWatch Tool, the probability of an additional 25-basis-point cut in December has dropped to 72.8%, down sharply from 91.1% a week earlier.
Adding to the Greenback’s strength, US Treasury Secretary Scott Bessent said in an interview with Fox Business Network that Washington and Beijing are set to sign the long-awaited trade deal “possibly as soon as next week,” referring to the completion of the so-called “Kuala Lumpur Agreement.”
Investors now await comments from Fed officials Raphael Bostic (Atlanta) and Beth Hammack (Cleveland) later in the North American session for further policy cues.
UK Fiscal Worries Weigh on Sterling
The Pound remains under heavy pressure amid renewed concerns over the UK’s economic and fiscal outlook. Investors fear that Chancellor Rachel Reeves may face mounting political and financial challenges in her upcoming November budget, as weaker productivity and widening fiscal gaps raise the likelihood of higher taxes or additional borrowing.
The Office for Budget Responsibility (OBR) recently forecast that UK productivity could decline by 0.3%, potentially expanding the fiscal deficit by £21 billion by 2029–2030. The Institute for Fiscal Studies (IFS) also estimates a £22 billion shortfall in the government’s finances, warning that Reeves may be forced to either raise taxes or borrow more to fund public services.
Either option would risk breaking Labour’s pre-election pledge not to increase income tax, National Insurance, or VAT for working people, and not to borrow for day-to-day spending — a prospect that could further erode consumer confidence and investor sentiment toward the Pound.
Weekly Currency Performance
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF |
|---|---|---|---|---|---|---|---|
| Change (%) | +0.57 | +1.44 | +0.79 | 0.00 | –0.03 | +0.97 | +0.72 |
The British Pound has been the weakest major currency this week, reflecting its underperformance against a broadly stronger US Dollar.
Technical Outlook: GBP/USD Eyes 1.3000 Support
Technically, the GBP/USD pair remains biased to the downside after breaching its 200-day Exponential Moving Average (EMA) around 1.3270. The 14-day Relative Strength Index (RSI) continues to slide below 40.00, signaling the emergence of fresh bearish momentum.
The next key support lies at the psychological 1.3000 level, while on the upside, 1.3370 (Tuesday’s high) is expected to act as a near-term resistance.
Summary
The combination of a hawkish Fed, stronger US Dollar, and rising UK fiscal concerns leaves the Pound Sterling vulnerable to further losses. Unless domestic data or fiscal assurances shift sentiment, the GBP/USD pair may continue to trend lower toward the 1.3000 mark in the short term.
Would you like me to produce a short 120–150-word “headline summary” version f
