GBP/USD Holds 1.3385 Amid Fed Rate Hike Expectations
The pound trades near 1.3385 as dollar pressure eases ahead of US-Gulf talks and UK PMI data.
Key points
- GBP/USD trades at 1.3385, up 0.15% as the dollar weakens ahead of US-Gulf talks.
- The Fed expects one more rate hike this year due to inflation from oil prices and growth.
- Technical resistance sits at 1.3467 and 1.3495, while support is tested at 1.3336.
The British pound trades at 1.3385 against the US dollar, up 0.15% during Tuesday’s European session. This modest gain reflects slight dollar weakness ahead of high-stakes energy talks in New York.
The dollar index sits near 100.35, showing limited directional movement. Market attention turns to US-Gulf leaders meeting at the United Nations General Assembly later in the day.
Dollar pressure precedes diplomatic talks
The US dollar weakened against the New Zealand dollar by 0.40% today. It also fell 0.11% against the pound, indicating broad-based softness in greenback demand. This softness provides temporary support for the sterling pair.
Investors await outcomes from US-Gulf discussions on Middle East energy supply. These talks may influence crude oil prices and subsequent inflation expectations. A stronger dollar could follow if energy security concerns ease.
Fed hawkishness caps pound upside
The Federal Reserve is expected to deliver one more interest rate hike this year. Policymakers cite elevated oil prices and strong economic growth as drivers of inflation. This hawkish stance supports the dollar and limits GBP/USD rallies.
In the UK, September S&P Global PMI data releases on Wednesday. The report is expected to show cooling business activity growth. This data may reduce pressure on the Bank of England to tighten further.
Technical resistance caps near-term gains
GBP/USD trades below the 20-period exponential moving average at 1.3467. The pair also sits under the broken support trendline at 1.3495. This structure confirms a bearish near-term tone for the currency pair.
The 14-period Relative Strength Index stands at 37.7, just above oversold territory. This suggests weakening downside momentum but no immediate bullish reversal. Traders watch 1.3336 for a potential break toward 1.3300.
