British Pound edges lower against US Dollar as key US economic releases approach

• Ahead of the US flash Q3 GDP and PCE inflation releases, the British Pound eases against the US Dollar.
• Growth in the US economy is forecast to have accelerated to 3.2% over the July-September period.
• Rate rises at the forthcoming Fed and BoE policy meetings remain firmly expected by investors.

Near 1.3312 in Thursday’s European session, the British Pound (GBP) is slightly weaker against the US Dollar (USD). A recovery in the US Dollar (USD) weighs on GBP/USD as financial markets remain confident that the Federal Reserve (Fed) will raise interest rates in December, having held them unchanged at Wednesday’s policy meeting.

Following Wednesday’s correction, which ended a three-day run of gains, the US Dollar Index (DXY) is trading modestly higher at around 102.20 at the time of writing. The index measures the Greenback’s value against six major currencies.

A widely expected pause after September’s increase left the fed funds rate at "3.75–4.00%", analysts at MUFG/BTMU observe. They nevertheless emphasise that the decision "included two dissents in favour of another rate increase," pointing to a persistent hawkish inclination within the committee. The analysts also draw attention to Fed Chair Warsh’s statement, noting that he "reiterated the Fed’s commitment to returning inflation to 2%".

Further policy action this year remains investors’ expectation, according to MUFG/BTMU, who add that "markets continue to price around an 87% probability of a December rate hike,".

Due at 12:30 GMT, the United States (US) flash Q3 Gross Domestic Product (GDP) figures and September’s Personal Consumption Expenditure (PCE) Price Index are the next economic releases investors are awaiting.

An annualised expansion of 3.2% is estimated for the US economy, up from the previous reading of 2.2%. Meanwhile, core PCE inflation, the Fed’s preferred inflation measure, is forecast to rise to 3.1% Year-on-Year (YoY), compared with 3% previously.

Attention in the UK turns to next week’s monetary policy announcement from the Bank of England (BoE). An interest rate increase of 25 basis points (bps), taking the rate to 4%, is regarded as almost certain.

GBP/USD Remains Under Pressure Below Its 20-Day EMA

Trading at 1.3307 on the daily chart, GBP/USD remains just below its 20-day exponential moving average (EMA) of 1.3318, maintaining a slightly bearish short-term outlook. This positioning indicates that nearby dynamic resistance continues to constrain the latest rebound. At around 48, the Relative Strength Index (RSI) suggests consolidation rather than directional momentum. The pair therefore remains exposed to weakness unless it can regain the 1.3318 threshold.

A sustained move through the 20-day EMA at 1.3318, the immediate resistance level, would relieve downward pressure and create scope for a more substantial recovery. The available dataset provides no clear support indicators, so traders may use recent chart lows as reference points. Nevertheless, the central technical question remains whether GBP/USD can clear the 1.3318 ceiling and remove the prevailing bearish bias.

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