1.34: British Pound pulls back as Iran tensions lift USD demand

0.16% decline takes GBP/USD to 1.3372 amid mounting geopolitical tensions.
194K US jobless claims underline continued labour market resilience.
Ahead of UK data, expectations for a November BoE rate rise hold firm.

GBP/USD is down 0.16% at 1.3372. Sterling has pulled back from a high of 1.3419 against the US Dollar as Middle East tensions intensify and US employment figures point to a still-robust labour market. These developments raise the likelihood of a Federal Reserve rate increase, though not in October.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Sterling slips as geopolitical risks and firm US jobs data outweigh BoE rate-rise expectations

Most G7 currencies, Sterling included, are under pressure from the intensifying US-Iran conflict. Iran’s IRGC Navy warned it would strike US bases if the US encourages vessels to pass through the Strait of Hormuz. Investor concerns over a more prolonged conflict also deepened on reports that the US and Israel are preparing a further round of strikes after the US midterm elections.

The reports lifted crude prices, taking West Texas Intermediate (WTI) up 0.69% to $98.29 per barrel. US Treasury yields, by contrast, are dropping sharply as traders leave stocks for the safety of US Treasuries.

At 194K, US Initial Jobless Claims for the week ending 24 October fell to a near 57-year low. The reading was better than the 200K forecast and down from the previous 199K. A decline in the 4-week average to 197.75K also pointed to limited layoffs.

With the odds at 8%, an October Federal Reserve rate increase is effectively off the table. December, however, carries a near 80% probability, according to Prime Terminal.

Higher-than-expected inflation figures released during the week have strengthened expectations of a Bank of England rate rise at its 5 November meeting. Traders now await UK Retail Sales and the S&P Global Flash PMIs, releases that could further support the case for higher rates.

Attention is also turning to UK Finance Minister John Healey and his first budget, expected on 28 October. Major investors expect it to pass without causing undue market disruption.

1.3403 resistance in focus: GBP/USD technical price forecast

Chart Analysis GBP/USD — GBP/USD: daily price chart

At 1.3379 on the daily chart, GBP/USD remains constrained below the key simple moving average cluster around 1.3407 and the nearby downward trend-line break at 1.3403. The Relative Strength Index (14), however, is near 56, pointing to improving upward momentum despite that structural pressure. Any extension of the recovery would first need to test this narrow overhead resistance zone.

The descending trend line provides immediate resistance at 1.3403, reinforced by the simple moving average cluster around 1.3407. A sustained move through this zone could clear a path towards further trend-line resistance near 1.3624 and 1.3808. Initial support lies around 1.3268, where the former downward resistance line now provides a structural floor. A break below it would leave the pair exposed to a deeper decline within the wider range.

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

GBP: Today's Currency Performance

Today's percentage moves in the British Pound (GBP) against the major currencies listed are set out below. The New Zealand Dollar was the currency against which the British Pound performed best.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.16%	0.10%	-0.66%	-0.19%	0.12%	0.37%	-0.21%
EUR	-0.16%		-0.08%	-0.85%	-0.38%	-0.04%	0.20%	-0.40%
GBP	-0.10%	0.08%		-0.78%	-0.32%	0.02%	0.26%	-0.31%
JPY	0.66%	0.85%	0.78%		0.46%	0.79%	1.00%	0.45%
CAD	0.19%	0.38%	0.32%	-0.46%		0.32%	0.58%	-0.01%
AUD	-0.12%	0.04%	-0.02%	-0.79%	-0.32%		0.22%	-0.33%
NZD	-0.37%	-0.20%	-0.26%	-1.00%	-0.58%	-0.22%		-0.54%
CHF	0.21%	0.40%	0.31%	-0.45%	0.01%	0.33%	0.54%

Percentage movements between the major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. To read GBP (base)/USD (quote), for example, start with the British Pound on the left and follow its row across to the US Dollar column. The intersecting cell gives the percentage change for that pair.