GBP\/USD fell for a fifth day on Friday and moved back towards a near one-month low set on Thursday. It traded below the mid-1.3400s in the Asian session, with markets waiting for new US data.<\/p>\n
The advance US Q4 GDP report and the US Personal Consumption Expenditure (PCE) Price Index are due later. These releases are being used to assess the Federal Reserve\u2019s rate-cut path, supporting the US Dollar near its highest level since 23 January.<\/p>\n
The Bank of England kept rates at 3.75% in February in a 5-4 vote, with four members backing a 25 basis point cut. UK unemployment rose to 5.2%, payrolls fell by 30K, headline CPI eased to 3%, and the Retail Price Index fell to 3.8%.<\/p>\n
US Federal Open Market Committee minutes described growth as \u201csolid\u201d and said progress towards the 2% inflation target may be \u201cslower and more uneven\u201d. Some members said rate rises could still be possible if inflation picks up again.<\/p>\n
Friday\u2019s UK retail sales and preliminary PMI data, plus US GDP and core PCE, are scheduled ahead of the March BoE decision.<\/p>\n
The pound sterling is showing significant weakness against the US dollar, continuing a downward trend we saw developing last year. This move is driven by the widening gap between the economic outlooks for the UK and the United States. Derivative traders should anticipate this divergence to persist in the coming weeks.<\/p>\n
We remember last year when the Bank of England nearly voted to cut rates from 3.75% amidst rising unemployment and falling inflation. While that dovish pivot was premature, the UK economy is still struggling, with the latest data showing inflation remains sticky at 3.1% and Q4 2025 GDP growth was a mere 0.2%. This puts the Bank of England in a difficult position, limiting its ability to support the pound.<\/p>\n
Conversely, the US economy continues to display the solid growth the Federal Reserve noted back in 2025. The recent January 2026 non-farm payroll report massively beat expectations, adding 255,000 jobs and keeping the unemployment rate at a low 3.6%. This strong data supports the Fed’s higher-for-longer interest rate stance, making the US dollar more attractive.<\/p>\n
Given this backdrop, traders should consider buying GBP\/USD put options to protect against or profit from a further slide below the 1.3400 level. Establishing short positions in the futures market could also be a viable strategy to capitalize on the pound’s vulnerability. These positions benefit from a continued decline in the currency pair’s value.<\/p>\n
The ongoing policy differences will likely increase price swings, creating opportunities for volatility traders. Ahead of upcoming inflation reports from both the UK and the US, using straddle or strangle options strategies could be effective. These allow traders to profit from a significant price move in either direction, without betting on the specific outcome of the data releases.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" GBP\/USD slid for fifth day toward one-month low, as markets awaited US GDP and core PCE data.<\/p>\n","protected":false},"author":62,"featured_media":17035,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42389","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42389","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=42389"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42389\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17035"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=42389"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=42389"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=42389"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}