GBP Holds Near Weekly Lows as Markets Await Fed Signals

Key Moments

GBP/USD trades just below 1.3600, consolidating near the lower end of its weekly range as buying interest remains subdued.
US PCE Price Index rises 3.7% over the 12 months through July, reinforcing expectations for at least one more Fed rate hike this year and supporting the USD.
Muted US bond yields and optimism around a potential US-Iran agreement on the Strait of Hormuz temper broader safe-haven demand for the Dollar.

GBP/USD Steadies Near Weekly Lows

The GBP/USD pair is trading in a tight range near the bottom of its weekly band, holding below the 1.3600 level during the Asian session on Thursday. Despite the subdued tone, downward momentum appears contained as market participants await additional guidance on the US Federal Reserve’s interest rate trajectory before committing to new positions.

US Inflation Data Supports Fed Hike Expectations

Fresh data released on Wednesday showed that the US Personal Consumption Expenditures (PCE) Price Index increased 3.7% over the 12 months through July, unchanged from the prior month and slightly above market expectations. The reading underscores persistent inflation pressures in the United States and reinforces the case for at least one additional Federal Reserve rate increase by year-end.

This backdrop is helping the US Dollar maintain its gains from the previous session, limiting any significant recovery attempts in GBP/USD.

Bond Yields and Geopolitics Limit Dollar Upside

At the same time, the US Treasury’s buyback strategy is contributing to subdued US bond yields. Softer yields, combined with improving sentiment around a potential US-Iran understanding and the partial reopening of the Strait of Hormuz, are restraining demand for the US currency as a safe-haven asset.

Media reports indicate that the United States and Iran have reached a new ceasefire deal that could be made public in the coming days. In addition, Iran and Oman have reportedly agreed on a temporary maritime corridor for commercial shipping through the Strait of Hormuz.

Gharibabadi, however, warned that the strait will not fully reopen until the US fulfills its commitments under an interim peace deal signed in June. This ongoing uncertainty sustains a geopolitical risk premium, providing underlying support for crude oil prices and the Greenback.

Against this backdrop, traders are staying cautious ahead of Fed Chair Kevin Warsh’s scheduled remarks at the Jackson Hole Symposium on Friday, which are expected to offer fresh direction for the US Dollar and the GBP/USD pair.

Technical Perspective on GBP/USD

On the technical front, GBP/USD remains constrained below a supply region in the 1.3660-1.3665 area. A clear move above this ceiling would likely be interpreted as a new bullish catalyst, potentially paving the way for a further upside extension.

On the downside, prior consolidation zones around the mid-1.3400s and low-1.3300s are seen as intermediate support levels. These areas could attract dip-buying interest and help preserve the broader recovery structure.

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

US Dollar Performance Versus Major Currencies This Week

The table below summarizes the percentage changes of the US Dollar (USD) against key major currencies this week. According to the data, the USD has been strongest against the Canadian Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.19%	0.32%	0.32%	0.53%	-0.31%	0.29%	0.47%
EUR	-0.19%		0.14%	0.04%	0.33%	-0.47%	0.11%	0.28%
GBP	-0.32%	-0.14%		-0.17%	0.21%	-0.58%	-0.03%	0.16%
JPY	-0.32%	-0.04%	0.17%		0.26%	-0.55%	0.06%	0.23%
CAD	-0.53%	-0.33%	-0.21%	-0.26%		-0.78%	-0.19%	-0.05%
AUD	0.31%	0.47%	0.58%	0.55%	0.78%		0.60%	0.78%
NZD	-0.29%	-0.11%	0.03%	-0.06%	0.19%	-0.60%		0.18%
CHF	-0.47%	-0.28%	-0.16%	-0.23%	0.05%	-0.78%	-0.18%