The pair drops to 1.3150 amid stronger USD demand fueled by an 86% chance of a Fed rate increase by year-end.
The British Pound declines 0.38% to 1.3150 against the US Dollar in European trading, pressured by hawkish Federal Reserve expectations. The US Dollar Index rises 0.3% to 101.70, its highest level in over a year.
Markets price an 86% probability of at least one Fed rate hike by December, driven by persistent inflation in both headline and core CPI data. In the UK, uncertainty over fiscal policy lingers following Prime Minister Keir Starmer’s resignation, with investors awaiting clarity on leadership.
Technical analysis shows GBP/USD breaking below key support levels, including a symmetrical triangle trendline at 1.3251 and the 10-day EMA at 1.3272, reinforcing a bearish near-term outlook.