British Pound holds steady above 1.3250 ahead of UK GDP data

• GBP/USD trades little changed around 1.3275 as Thursday’s early Asian session gets under way.
• Proactive monetary policy tightening is appropriate, according to BoE’s Greene.
• Bets on a 25 bps December Fed rate hike have risen to 87.3%.

GBP/USD remains largely unchanged near 1.3275 in early Asian trading on Thursday, with traders 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 Gross Domestic Product (GDP) estimate for the third quarter (Q3).

Near-term support for Cable against the USD could come from hawkish remarks made by BoE policymaker Megan Greene on Wednesday. Greene said it was appropriate to "proactively tighten ‌our monetary policy stance" to guard against wage growth remaining elevated and firms passing on those costs.

Expectations of a December Fed rate hike have strengthened after US Consumer Price Index (CPI) inflation came in above forecasts. Earlier this week, Fed Governor Christopher Waller said he would back a quarter-point increase in December, adding that he might press for a half-point rise if inflation figures were worse than expected.

According to the CME FedWatch Tool, markets now assign nearly an 87.3% probability to a Fed rate increase at the December policy meeting, with the odds of a 50 bps hike at 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,"

Can UK rates stay steady as Bailey’s speech and global data come into focus?

UK rates have begun the week on a steady footing, according to strategists at Societe Generale, who observe that the "10y IRS opens unchanged at 4.70% after holding 4.69% (100dma) last week." For nearby technical markers, they cite "support 4.58%, resistance 4.78%," while noting that Governor Bailey "speaks in Zurich later today, first intervention since the MPC rate increase week," making the speech an important event for Sterling and UK rates traders.

A full global data schedule lies ahead, Societe Generale notes, listing the "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." For the UK, attention centres on Thursday’s growth figures: "prel 3Q GDP" is scheduled for release, and SG "forecast 0.7% qoq," offering a key measure of domestic economic momentum after the recent MPC decision.

Do UK wage risks strengthen Greene’s case for proactive tightening?

A 9.4/10 FXS Speechtracker score, well above the historical baseline of 7.7/10, underscores the strongly hawkish message from BoE’s Greene. Her focus on the need to “proactively tighten our monetary policy stance” signals a distinct shift towards guidance favouring tighter policy.

The argument for acting sooner and more forcefully is reinforced by her assessment that UK wage growth is “too high” and that the labour market has less spare capacity than previously estimated. As markets assign a greater probability to further BoE tightening, persistent wage pressures combined with reduced slack favour a stronger Pound.

Technical Analysis: Can GBP/USD shake off its bearish bias below the 100-day SMA?

A bearish near-term outlook remains in place for GBP/USD on the daily chart, with spot trading below both the 100-day simple moving average (SMA) and the Bollinger middle band. Consolidation continues in the lower half of the recent Bollinger envelope, where the lower band provides a nearby area of demand. Meanwhile, a Relative Strength Index (14) reading of 43 points to muted, slightly negative momentum rather than oversold conditions.

The Bollinger middle band at 1.3370 forms the first resistance area, ahead of the 100-day SMA at 1.3400. A firmer upside barrier lies near 1.3475 at the Bollinger upper band. Immediate downside support rests at 1.3260, the Bollinger lower band. A clear break below that level would leave room for a steeper decline; holding above it would instead preserve range-bound trading, though overhead moving-average resistance would continue to weigh on the pair.

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