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GBP/USD extends its downward momentum, touching a new seven-month low at 1.3097 on Friday. The pair remains under persistent selling pressure as investors continue to favor the US Dollar (USD) amid reduced expectations of further Federal Reserve (Fed) easing.
This latest decline underscores the fragile sentiment surrounding the Pound Sterling (GBP), which has been unable to find support despite oversold conditions, reflecting broader market skepticism over the United Kingdom’s (UK) economic and fiscal outlook.
The US Dollar Index (DXY), which tracks the Greenback’s performance against six major currencies, holds near a three-month high at 99.80 after Fed Chair Jerome Powell downplayed the likelihood of another interest rate cut in December. According to the CME FedWatch tool, the chances of a 25-basis-point easing in December have fallen to 63% from over 90% a week earlier.
Comments from Fed officials on Friday reinforced this hawkish tone. Beth Hammack, President of the Federal Reserve Bank of Cleveland, said she would not have supported the latest rate cut, stressing the need to keep some monetary restriction to bring inflation back toward 2%.
Meanwhile, Raphael Bostic, President of the Federal Reserve Bank of Atlanta, acknowledged that the Fed’s dual mandates of price stability and full employment remain “in tension,” adding that more progress is needed before moving rates back to neutral levels.
On the UK side, the Pound Sterling remains weighed down by mounting concerns over the country’s fiscal outlook. The Office for Budget Responsibility (OBR) now projects a 0.3% decline in productivity, which could widen the budget deficit by around £21 billion by 2030.
According to the Institute for Fiscal Studies (IFS), the UK government already faces a £22 billion shortfall, which may force Chancellor of the Exchequer Rachel Reeves to either raise taxes or increase borrowing, both of which would contradict the Labour Party’s election pledges.
The combination of these fiscal constraints and growing expectations of Bank of England (BoE) rate cuts continues to weigh on the Pound Sterling.
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.33% | 0.12% | 0.00% | 0.23% | 0.24% | 0.39% | 0.25% | |
| EUR | -0.33% | -0.21% | -0.34% | -0.09% | -0.09% | 0.06% | -0.08% | |
| GBP | -0.12% | 0.21% | -0.14% | 0.12% | 0.13% | 0.28% | 0.12% | |
| JPY | 0.00% | 0.34% | 0.14% | 0.23% | 0.25% | 0.38% | 0.24% | |
| CAD | -0.23% | 0.09% | -0.12% | -0.23% | -0.01% | 0.15% | 0.02% | |
| AUD | -0.24% | 0.09% | -0.13% | -0.25% | 0.00% | 0.15% | 0.01% | |
| NZD | -0.39% | -0.06% | -0.28% | -0.38% | -0.15% | -0.15% | -0.15% | |
| CHF | -0.25% | 0.08% | -0.12% | -0.24% | -0.02% | -0.01% | 0.15% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).