Bias: Range-bound, current level sits around the 90-day average and in the lower half of the 3-month range.
Key drivers:
- Rate gap: The Fed is seen easing toward neutral in 2026, while the BoE signals gradual easing; this keeps USD/GBP from breaking out in either direction as policy paths diverge.
- Risk appetite: US payrolls and Fed commentary can lift the dollar when data supports growth; softer data tends to support the pound as risk takes a breather.
- Macro: BoE policy path suggests ongoing easing in 2026, keeping pressure on GBP unless UK data strengthens and inflation cools.
Range: Likely to drift within the 3-month range, with a mild tilt toward the lower end as buyers re-emerge near support.
What could change it:
- Upside risk: Strong US data or a hawkish Fed tone could push USD higher.
- Downside risk: Strong UK data or BoE signaling slower easing could lift GBP, pushing USD/GBP lower.
