British Pound retreats towards 1.32 as solid UK growth is overshadowed by Fed hawks

• A 0.38% decline takes GBP/USD to 1.3224 as losses stretch to a third day.
• Despite UK GDP growth of 0.7% in Q3, Sterling remains unable to rebound.
• Before Friday's US PPI release, the Fed's Hammack warns of worsening inflation.

Steady growth in UK Gross Domestic Product (GDP) and higher-than-expected US jobless claims have failed to halt the Pound Sterling's decline against the US Dollar. With losses continuing for a third consecutive day, GBP/USD is nearing 1.3200 and trades 0.38% lower at 1.3224.

GBP/USD losses deepen as hawkish Fed comments outweigh solid UK GDP

US unemployment benefit applications rose by 200K, exceeding both the 195K forecast and the previous reading of 191K. Continuing Jobless Claims, however, fell from 1.717 million to 1.697 million over the week, pointing to continued strength in the labour market.

Meanwhile, Existing Home Sales recorded a change of -5.5% compared with September's reading, falling from 3.97 million to 3.75 million.

Investors largely looked past the figures, focusing instead on remarks from Cleveland Fed President Beth Hammack. She warned that the inflation outlook was deteriorating while backing a gradual approach to monetary policy.

In a Yahoo! Finance interview, Chicago Federal Reserve (Fed) President Austan Goolsbee said inflation had been “well above target,” adding that the “hot inflation report wasn’t a one-off.”

UK GDP expanded by 0.7% in Q3, matching forecasts, but GBP/USD struggled to find support following Fed Governor Waller's hawkish comments last Tuesday. The figures follow the Bank of England (BoE) rate increase on 5 November. Investors have begun pricing in a further rise towards the end of the year, with the probability at 75%.

On the geopolitical front, US President Donald Trump said the US did not need an agreement with Iran. He also directed Vice President Vance to concentrate on domestic matters rather than pursuing a peace deal with Tehran.

The forthcoming US economic calendar includes remarks from Chicago Fed President Goolsbee, NY Fed President John Williams and other officials. Friday is expected to bring the release of the Producer Price Index (PPI); a stronger-than-forecast reading could pave the way for further tightening.

GBP/USD Price Forecast: Bearish pressure persists

At 1.3234 on the daily chart, GBP/USD retains a bearish short-term bias below the 50-, 100- and 200-day simple moving averages (SMAs), which converge around 1.3346. Immediate support lies near 1.3221, where the pair previously broke through descending trend-line resistance, and spot is holding just above that level. With the Relative Strength Index (14) at 40.5, below its midpoint, the signals suggest persistent downward pressure rather than a fully oversold market.

Any recovery would first encounter the Triple SMA resistance area near 1.3346. Beyond that lies the descending trend line linked to the 1.3653 high, with a break above it coming near 1.3372. Only a sustained advance beyond these levels would temper the prevailing bearish bias. Support initially rests at the nearby trend-line breakout around 1.3221, while the current 1.3234 area remains pivotal. A daily close beneath this floor would leave the pair vulnerable to additional losses; the broader resistance levels of 1.3708 and 1.3874 remain well above current prices.

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