From October 20-22 along the Huangpu River in Shanghai, the 2026 Sustainable Global Leaders Conference returns once again. Nobel and Turing Award winners will take the stage to discuss the future of technology and trends, and the internet-famous professor who "rescues" people from anxiety and the era of involution — Macfarlane — will hold a live dialogue with Xiang Biao! Limited spots available, first come first served. Let us journey together toward sustainability! [Click to register] HT Finance APP news — The GBP/USD currency pair, after stabilizing at low levels on Monday, continued a modest rebound during the Asian session on Wednesday, trading around 1.3260, up approximately 80 basis points from the low near 1.3177 touched last week.
The continued weakening of the US Dollar Index (DXY) has been the direct catalyst driving the pair's rebound — DXY touched a year-to-date high of 102.61 on Monday before retreating for consecutive sessions, trading around 102.11 during the Asian session on Wednesday, after closing down 0.38% at 102.20 on Tuesday. However, the bullish and bearish factors facing the pound are equally complex, and the sustainability of the rebound still requires dual verification from tonight's US CPI data and internal policy signals from the Bank of England.
The core driver behind the dollar's weakness came from the dovish remarks made by New York Fed President Williams on Tuesday. Williams explicitly stated that he believes one more rate hike this year may be appropriate, but there is no reason for any further rate increases in 2027. "I haven't changed my view that one more hike may be possible," he said, "but I see no reason at present to believe we need to take more measures." This statement represents the clearest "end of rate hikes" signal from a core official during this tightening cycle. Speech tracking indicators show that Williams's dovish score for this speech was only 3.4, well below his historical average of 5.8. The Fed sentiment index fell 3.09 points to 133.86 that day, and while still above the neutral 100 line, a meaningful dovish shift has occurred at the margin. Scotiabank strategists noted that "the Fed's recent communication has been mixed in wording but overall softening the intensity of hawkish rhetoric," and this shift has had a clear moderating effect on overall tightening expectations, with the market currently pricing in only about 5 basis points of tightening for October and 25 basis points for December.
However, divisions within the Fed have not disappeared. Boston Fed President Collins said the same day that further rate hikes before year-end remain under consideration; Chicago Fed President Goolsbee emphasized that cost increases from AI data center construction are spreading to broader areas; Cleveland Fed President Hammack went further, stating outright that inflationary pressures have exceeded the energy sector. CME's FedWatch Tool shows the probability of keeping rates unchanged in October at approximately 77.3%, a sharp jump from 51% a month ago, but the pricing probability for a December rate hike remains as high as 87.8%. This means the market consensus is "skip in October, act in December," rather than the hiking cycle being over.
The US September CPI data to be released tonight at 20:30 will directly test this consensus. The market broadly expects headline CPI to rise from 3.4% to 3.6% year-over-year, with a 0.6% month-over-month increase, primarily driven by gasoline prices — the average US gasoline price reached a record $4.33 per gallon in September. Core CPI is expected to rise 0.2% month-over-month and 2.5% year-over-year. StoneX senior market strategist Haberkorn said: "There are some inflation data coming later this week, so the market is watching to see how things develop." Societe Generale strategists noted that if core CPI comes in at 2.5% as expected, it would "barely change the market's judgment on the future policy path." But core forecasts diverge significantly — Deutsche Bank's is the most moderate at 0.16%, while Goldman Sachs, Barclays and Morgan Stanley are at 0.24%. Bank of America economist Junod explicitly stated that a 0.2% month-over-month core CPI would not push up rate hike expectations, but a 0.3% reading could reignite October rate hike speculation. For GBP/USD, softer CPI data would reinforce Williams's dovish logic and push the dollar further lower, with the pair potentially challenging the 1.3375 resistance zone; stronger data could rekindle hawkish expectations, with the pair potentially falling back to 1.3200 or even 1.3150.
Policy signals from the pound's side present a divergent pattern of "cautious governor, hawkish members." Bank of England Governor Bailey said Tuesday at the IMF annual meetings in Bangkok that UK businesses are doing everything possible to control costs, and the transmission of energy shocks to broader inflation has been "relatively moderate so far." Bailey emphasized that monetary policy requires "a firm commitment to restoring inflation to target levels," but did not directly address the timing of rate hikes, suggesting he prefers to wait for more data before making a judgment. The market currently prices a 25 basis point rate hike in November as near certain, but Bailey's cautious stance indicates the central bank is still weighing the persistence of energy shocks against the resilience of economic growth.
However, hawkish members of the Monetary Policy Committee are accelerating their rhetoric. Committee member Greene boldly declared on Monday that interest rates should be higher than the current 3.75%, arguing that the IMF had just raised its UK 2026 economic growth forecast from 1% to 1.3%, and faster-than-expected economic growth indicates that existing policy tightening is insufficient. Greene also warned colleagues not to rely on the market to tighten financial conditions on their behalf. MPC member Mann also pointed out that conditions are forming for wages and prices to mutually reinforce and continue rising, and she has consistently voted for a 25 basis point hike to 4% over the past few months. UK gilt yields surged in tandem — the 10-year UK gilt yield rose to 5.527%, the highest since 2007; the 30-year yield climbed to 6.047%, the highest level since 1998. Elevated borrowing costs and hawkish policy signals are resonating, providing the pound with interest rate differential support.
ING provided a detailed assessment of the pound's policy environment in its latest report. ING believes the BoE's 2027 rate expectations are "too hawkish" (the market is pricing in a cumulative 100 basis points of hikes through July), but acknowledges that "one to two rate hikes look increasingly likely," and any "dovish turn" may "not appear until the second half of 2027, which would support a stronger pound." On the fiscal front, ING lists the October 28 UK budget as a "potential risk for the pound," as the market is currently underpricing fiscal issues. However, ING notes that Chancellor Healey and Prime Minister Burnham "appear to be aware of market sensitivity," and while the budget "will be closely scrutinized," they "do not currently expect it to trigger significant bond volatility or leave a lasting negative impact on the pound." On the exchange rate outlook, ING has lowered its EUR/USD forecast to 1.13 for Q4 and 1.13 for Q1, and warned that "1.1100 remains a downside risk for EUR/USD" — a judgment that also serves as an indirect reference for GBP/USD.
From a technical perspective, on the daily chart, GBP/USD maintains a bearish bias, with the pair trading right around the Bollinger Band 20-day simple moving average, while still constrained by the 100-day simple moving average and the upper Bollinger Band, keeping the recent bearish tone intact. The 14-day Relative Strength Index (RSI) is around 44 to 45, below the neutral 50 level, indicating that the recent rebound lacks convincing upward momentum and sellers still hold a structural advantage. The MACD indicator is below the zero line, emitting a bearish signal; the 10-day simple moving average at approximately 1.3230 provides immediate dynamic support, while the 50-day moving average at approximately 1.3420 and the 250-day moving average at approximately 1.3400 form a medium-term dense resistance zone. On the upside, the upper Bollinger Band at approximately 1.3375 and the 100-day moving average at approximately 1.3395 form a dense supply zone, and sellers are likely to re-enter on any rebound into this area. Only a effective break above 1.3395 and a sustained hold above it could bring substantive relief to the short-term bearish setup. On the downside, the lower Bollinger Band at approximately 1.3150 constitutes the most immediate downside defense; a daily close below this level would further reinforce the current bearish tone and open space for a deeper pullback, with downside targets looking toward 1.3100 and even 1.3044.
On the 4-hour timeframe, after rebounding from the 1.3177 low, the pair has formed a higher-low structure, with short-term moving averages beginning to turn upward, MACD green bars continuing to contract, and the fast line gradually approaching the slow line, with rebound momentum being released modestly. The first short-term resistance is 1.3275, the intraday high area; strong resistance is in the 1.3300 to 1.3375 zone, and only a sustained hold above this area could restart a larger-scale rebound. On the downside, the first support is 1.3220, with core support at the 1.3200 round number; a break below would lead to a further test of the 1.3150 lower Bollinger Band.
Editor's Summary
GBP/USD is currently in a dual favorable window of "dollar dovish retreat" and "UK hawkish escalation," but the sustainability of the rebound still faces three tests. Williams's rare statement delineating the end of rate hikes in 2027 has brought阶段性 downward pressure on the dollar, while the密集 rhetoric from BoE hawkish members Greene and Mann, along with near-certain November rate hike pricing, has provided the pound with interest rate differential support. However, tonight's US CPI data is the ultimate variable determining short-term direction — a moderate core CPI (0.2% or below) would reinforce the dovish logic and push the pair toward the 1.3375 to 1.3395 dense resistance zone; a stronger core reading (0.3% or above) could rekindle hawkish expectations, with the pair facing the risk of falling back to 1.3200 or even 1.3150. In the medium term, the fiscal risk of the October 28 UK budget, ING's cautious stance on the pound's outlook, and the dense supply zone formed by the 100-day moving average and upper Bollinger Band on the technical chart jointly limit the pound's sustained upside potential. Caution should be maintained before the CPI data is released.
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