The dollar's retreat pushes GBP/USD higher, with the market focused on the Fed's September rate cut.
2025-09-12 14:22:34
On Thursday, the British pound rose by more than 0.33% against the US dollar, mainly due to the decline of the US dollar. Investors are betting that the Federal Reserve will take interest rate cuts in its next series of interest rate decisions, which will boost short-term risk appetite in global markets and support the strength of the British pound.
The market will pay close attention to the Federal Reserve's interest rate decision on September 17, while the Bank of England meeting that follows will receive relatively less attention.
The US Consumer Price Index (CPI) rose to 2.9% year-on-year in August, up 0.4% month-on-month, indicating continued accumulation of front-end inflationary pressures. Food and housing prices were the primary drivers, with grocery prices rising 0.5% month-on-month. The core CPI (excluding energy and food) rose to 2.9% year-on-year, in line with market expectations.
Analysts pointed out that despite a slight increase in inflation, the market still firmly believes that the Federal Reserve will continue to cut interest rates.
Market expectations of Federal Reserve rate cuts continue to drag down the dollar. According to the CME FedWatch tool, investors have fully priced in the 25 basis point rate cut on September 17th, and the market is pricing in almost 95% probability of further rate cuts on October 29th and December 10th. Investors are focused on the impact of the pace of rate cuts on global liquidity and asset prices.
The University of Michigan Consumer Confidence Index will be released on Friday and is expected to fall slightly from 58.2 to 58.0. The market generally believes that this data will have limited impact on the US dollar and the short-term trend of GBP/USD.
Looking at the daily chart, GBP/USD has closed higher for consecutive days and is currently trading around 1.2920. Short-term resistance lies at 1.2950 and 1.2980, a break of which could test the 1.3000 mark. Support lies at 1.2890 and 1.2850, and a pullback to these support levels could trigger a buying rally.
The RSI indicator remains in the 55-60 range, indicating that the short-term upward trend still has room to continue, but we need to be wary that an unexpected rebound in the US dollar may cause the pound to pull back.
Editor's opinion:
Overall, the rise of GBP/USD was mainly supported by the short-term weakness of the US dollar and market expectations of a Fed rate cut. Despite rising US inflation, the expectation of a rate cut still dominated market sentiment.
In the short term, we need to pay attention to the impact of the Federal Reserve's interest rate decision and consumer confidence data on the US dollar. At the same time, technical analysis shows that the pound is expected to maintain a relatively strong pattern against the US dollar, but the breakthrough of the resistance zone will determine the next upward space.
The market will pay close attention to the Federal Reserve's interest rate decision on September 17, while the Bank of England meeting that follows will receive relatively less attention.
The US Consumer Price Index (CPI) rose to 2.9% year-on-year in August, up 0.4% month-on-month, indicating continued accumulation of front-end inflationary pressures. Food and housing prices were the primary drivers, with grocery prices rising 0.5% month-on-month. The core CPI (excluding energy and food) rose to 2.9% year-on-year, in line with market expectations.
Analysts pointed out that despite a slight increase in inflation, the market still firmly believes that the Federal Reserve will continue to cut interest rates.
Market expectations of Federal Reserve rate cuts continue to drag down the dollar. According to the CME FedWatch tool, investors have fully priced in the 25 basis point rate cut on September 17th, and the market is pricing in almost 95% probability of further rate cuts on October 29th and December 10th. Investors are focused on the impact of the pace of rate cuts on global liquidity and asset prices.
The University of Michigan Consumer Confidence Index will be released on Friday and is expected to fall slightly from 58.2 to 58.0. The market generally believes that this data will have limited impact on the US dollar and the short-term trend of GBP/USD.
Looking at the daily chart, GBP/USD has closed higher for consecutive days and is currently trading around 1.2920. Short-term resistance lies at 1.2950 and 1.2980, a break of which could test the 1.3000 mark. Support lies at 1.2890 and 1.2850, and a pullback to these support levels could trigger a buying rally.
The RSI indicator remains in the 55-60 range, indicating that the short-term upward trend still has room to continue, but we need to be wary that an unexpected rebound in the US dollar may cause the pound to pull back.
Editor's opinion:
Overall, the rise of GBP/USD was mainly supported by the short-term weakness of the US dollar and market expectations of a Fed rate cut. Despite rising US inflation, the expectation of a rate cut still dominated market sentiment.
In the short term, we need to pay attention to the impact of the Federal Reserve's interest rate decision and consumer confidence data on the US dollar. At the same time, technical analysis shows that the pound is expected to maintain a relatively strong pattern against the US dollar, but the breakthrough of the resistance zone will determine the next upward space.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
