The pound traded near $1.3400 on Friday, up 0.19% on the day, as traders priced in a near-certain Bank of England interest rate increase next week while trimming bets on further Federal Reserve tightening after fresh US data.
BoE hike fully priced
Markets expect the Bank of England to raise Bank Rate to 4% at its November meeting, with the swaps market pricing a 100% chance of the move.
By our own measurement, GBP/USD stood at $1.3393 as of 31 October 2026 at 14:38 GMT, near its 31-day high. CFTC data for the week of 27 October 2026 showed speculators still net short sterling, holding 79,414 contracts, down from 80,420 a week earlier.
Fed odds pulled back
US data released this week showed the economy grew 3.4% year-on-year in the third quarter, beating forecasts, while core PCE inflation came in at 3.1% year-on-year, in line with estimates. The odds of a December Fed rate hike fell to 70%, down from about 84% priced on Wednesday just after the Fed’s own decision.
US tech stocks fell more than 3% on disappointing earnings. The US federal funds rate stood at 3.88% following the move made on 29 October 2026.
Chart signals steady
On the daily chart, GBP/USD was seen near 1.3392, with the 14-day Relative Strength Index at 56.7, a reading that points to room for further gains without flagging overbought conditions.
Related: Pound nears 1.3400 as dollar eases on softer Treasury yields
Source: Federal Reserve | Data: FRED — St. Louis Fed · Swissquote · CFTC
