- GBP/USD fell to 1.3425 on Nov 10, hovering near 1.3430 ahead of US CPI.
- Fed Governor Christopher Waller backed a December rate hike, even if inflation improves.
- A stronger dollar and high rates typically weigh on both gold and crypto assets.
GBP/USD dropped from approximately 1.3460 to roughly 1.3425 in the morning of November 10, and is currently hovering around 1.3430 while forex traders wait for the October US CPI report.
The pound hasn’t clearly weakened ahead of the release, but the dollar is drawing support from rising expectations that the Fed might hike rates again in December. Whether that dollar strength lasts could hinge on the upcoming inflation numbers.
Federal Reserve Governor Christopher Waller signaled on Tuesday that interest rates are likely heading higher. He stated that he would back a rate increase in December even if October inflation numbers show improvement.
Waller also noted that if core inflation (which excludes volatile food and energy costs) rises by 0.3% or more for the month, the Fed should consider a bigger 0.50% rate hike, compared to the usual 0.25%
Following his statements, financial traders put the odds of a rate hike in December at over 80%.
What Does the GBP/USD Chart Show?
Prior to the CPI release, GBP/USD was trading close to 1.3460, with early trading fairly quiet as investors waited for the numbers. Near-term support is around 1.3400, and resistance is near 1.3500.
The dollar’s edge comes from changing rate expectations, but the pound has domestic policy backing as well. The Bank of England lifted its benchmark rate to 4% on November 5, and warned that UK inflation could hit roughly 5% by mid-2027 due to higher energy costs.
This shows that the GBP/USD exchange rate is moving based on interest rate decisions from both the UK and the US.
How Could CPI Affect the Dollar, Bitcoin, and Gold?
Economists expected overall inflation to rise by 0.3% in October, marking a cooldown from September’s 0.6% jump. Core inflation, which leaves out unpredictable food and energy costs, was expected to come in at 0.2%, down from 0.3% the previous month.
If inflation comes in higher than expected, especially core inflation, the US dollar will likely gain strength as investors prepare for more Fed rate hikes.
Higher rates and a stronger dollar would be bad news for gold and Bitcoin. Higher interest rates make cash and bonds more attractive, leaving less incentive for people to put money into safe havens like gold that don’t pay interest, or riskier assets like crypto.
At the end of the day, GBP/USD sitting near 1.3430 doesn’t necessarily mean traders expect an inflation surprise. It shows that investors are playing it safe ahead of a key economic report, whereas expectations of higher Fed interest rates are already providing the US dollar with a boost.
Related: US CPI Forecast November 10 2026: Will Inflation Cool or Surprise Markets?
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