Above 1.3250: British Pound holds steady ahead of UK GDP data

• 1.3275 is the trading level for GBP/USD, little changed in early Asian trading on Thursday.
• Proactive monetary tightening is appropriate, according to the BoE’s Greene.
• 87.3% is now the probability traders assign to a 25 bps Fed rate increase in December, following a rise in bets.

1.3275 remains the level around which GBP/USD is trading steadily. In Thursday’s early Asian session, traders are weighing the policy outlook for the Bank of England (BoE) and the US Federal Reserve (Fed). Later on Thursday, the UK will publish its preliminary third-quarter (Q3) Gross Domestic Product (GDP) figures.

The risk of persistently elevated wage growth and firms passing on those costs warrants a proactive response, BoE policymaker Megan Greene indicated on Wednesday. She said it was appropriate to "proactively tighten ‌our monetary policy stance" to guard against those risks. Her hawkish remarks could lend Cable some near-term support against the USD.

Stronger-than-expected US Consumer Price Index (CPI) inflation figures have prompted traders to increase bets on a December Fed rate rise. Earlier this week, Fed Governor Christopher Waller said he would back a quarter-point increase in December. He might favour a half-point rise if inflation figures prove worse than expected.

According to the CME FedWatch Tool, market pricing now puts the likelihood of a rate increase at the Fed’s December policy meeting at nearly 87.3%. The probability assigned to a 50 bps rise is 12.7%.

Elias Haddad, global head of markets strategy at Brown Brothers Harriman & Co., said: "We've got broad-based strength in the dollar largely underpinned by a hawkish shift in Fed fund rate expectations driven by the hot October CPI print but amplified as well by recent comments by Fed officials,"

4.70%: UK rates open steady ahead of Bailey speech and global data

A stable opening to the week for UK rates is the assessment of strategists at Societe Generale: "10y IRS opens unchanged at 4.70% after holding 4.69% (100dma) last week." Their nearby technical markers are "support 4.58%, resistance 4.78%," while Governor Bailey’s appearance is a key focus for Sterling and UK rates traders. They note that he "speaks in Zurich later today, first intervention since the MPC rate increase week," highlighting the significance of the event.

Thursday’s preliminary UK growth figures are a particular focus for Societe Generale. With "prel 3Q GDP" due, SG says "forecast 0.7% qoq," an important measure of domestic momentum after the recent MPC decision. The release forms part of a packed international calendar, which the bank outlines as "week ahead: US CPI, PPI, Fed speak incl Waller and Williams. EU 3Q GDP second read. UK prel 3Q GDP. China trade balance. CPI for Mexico, Norway, Czech Republic, Hungary, India."

9.4/10: Greene signals proactive tightening amid UK wage risks

A 9.4/10 FXS Speechtracker score places BoE policymaker Greene’s strongly hawkish message well above the historical baseline of 7.7/10. Her focus on “proactively tighten our monetary policy stance” signals a distinct move towards tighter policy guidance.

Earlier and more forceful action is further supported by her assessment that UK wage growth is “too high” and labour market slack is less than previously estimated. Persistent wage pressures alongside reduced slack favour a stronger Pound bias, as markets assign a greater probability to further BoE tightening.

Technical Analysis: 100-day SMA keeps GBP/USD outlook bearish

Below both the 100-day simple moving average (SMA) and the Bollinger middle band, GBP/USD retains a bearish near-term outlook on the daily chart. Consolidation is taking place in the lower half of the recent Bollinger envelope, where the lower band provides nearby demand. A Relative Strength Index (14) reading of 43 points to muted, slightly negative momentum, rather than an oversold market.

The Bollinger lower band at 1.3260 provides immediate support. A clear break below that level would pave the way for a deeper decline; holding above it would preserve range-bound trading, though moving-average resistance overhead would continue to weigh on the pair. Initial upside resistance lies around 1.3370 at the Bollinger middle band, ahead of the 100-day SMA at 1.3400. A firmer ceiling sits near 1.3475 at the Bollinger upper band.

(The technical analysis of this story was written with the help of an AI tool. Know more.)