The GBP/USD pair is holding steady above the 1.3300 psychological level, trading near 1.3310 in Friday’s Asian session. After three days of small losses, the Pound Sterling (GBP) is regaining support, helped by the Bank of England’s (BoE) firm and careful approach to monetary policy.
The BoE continues to focus on bringing down stubborn inflation, which remains a key challenge for the UK economy. On Thursday, BoE policymaker Catherine Mann said that interest rates need to stay high for a while to ensure price growth slows and economic stability returns. She noted that “inflation remains persistent while growth is modest,” showing that the BoE’s top priority is price control over fast growth.
Adding to this sentiment, UK Treasury official James Murray said the government is working to prevent a wage–price spiral by limiting public sector pay increases. This aligns with the UK’s goal to maintain a balanced and stable economy.
In the US, the ongoing government shutdown has increased risk aversion, giving temporary support to the US Dollar (USD). However, comments from Federal Reserve (Fed) officials Mary Daly and Michael Barr suggested the Fed may ease policy further if inflation continues to decline.
The GBP/USD pair is currently pulled between the BoE’s tight stance on inflation, which supports the Pound, and safe-haven demand for the Dollar. As long as the BoE stays strict, support around 1.3300 is likely to hold. Traders will continue watching US political developments and Fed signals for the next move in the FX market trend.
