Some Strength for the Pound Despite Weak Data

The pound made gains overall against various currencies, notably the US dollar, in the week ending 17 October. The job report on 14 October was overall weak and GDP was nearly static, although meeting the consensus. This article summarises recent major economic releases from Britain, then looks briefly at the charts of GBPUSD and GBPNZD.

The British job report on Tuesday 14 October was overall negative with both claimant count change and unemployment higher:

4.8% unemployment in the three months to August was the highest since summer 2021. The release came in the context of rising unemployment in Britain for the whole of 2025. Claimant count change for September at 25,800 was more than double the consensus but August’s figure was revised down significantly to negative 2,000.

Meanwhile, the monthly GDP for August on Thursday, 16 October, came in at 0.1% as expected. Participants generally reacted positively to the news, given that it might decrease somewhat the pressure on Chancellor Rachel Reeves to raise taxes at the upcoming Autumn Statement. Speculation about the contents of the statement has increased in the last few weeks, with many participants expecting both cuts to governmental spending and some degree of tax hike.

Speculation about monetary policy, on the other hand, has moved out of focus recently, with the Bank of England fairly widely expected to hold at 4% until the end of 2025. It’s early to try to predict the timing of the next cut; it could be sometime in the second quarter of 2026, but this might become clearer in the next few months.

Cable Bounces Despite Some Negativity from British Data

Cable moved up after the generally weak British job report on 14 October as the dollar declined in most of its pairs. The American government remains shut down, with this now the third longest in history having lasted 17 days, and there’s no immediate sign of resolution. However, the dollar received a boost on 17 October as Donald Trump appeared to walk back the previous week’s threats of fresh tariffs on China. In Britain, political developments are in focus as the government’s Autumn Statement approaches next month.

The overall sideways trend still seems to be active, with the area around $1.33 remaining an important support. Technical indicators are overall neutral about saturation and the price is in the value area between the 20 and 50 SMAs for now. Now that the 200 SMA has moved above the main static area of support, it might become a dynamic support.

$1.35 is a possible resistance having capped gains earlier this month and strengthened by the presence of the 100 SMA slightly below. September’s high around $1.365 is another possible resistance in the medium to longer term. British inflation on Wednesday 22 October is the critical release coming up; the annual core figure is currently expected to rise to 4%.

Pound-Kiwi Dollar Reaches a Decade’s High

GBPNZD reached new highs in the week ending 17 October as trade tension remained generally high and traders digested the Reserve Bank of New Zealand’s dovishness, which is likely to continue. The British job report was overall weak but the monthly GDP matched expectations with 0.1% growth. The current situation of a differential in rates of 1.5% in favour of the pound is historically extremely unusual: this is unlikely to shrink and, on the contrary, might increase by the end of the year, so fundamentals will probably continue to favour the pound for some time.

Technically, though, GBPNZD seems to be on shakier ground with strong buying saturation based on both the slow stochastic and Bollinger Bands. However, there hasn’t been a clear extension far above the moving averages. ATR has risen significantly over the last week, which might suggest continuation. Resistance in the short term isn’t clear, but if the uptrend continues, August 2015’s $2.41 could be a strong area of resistance.

The 20 SMA a bit above $2.32 looks like an obvious dynamic support and $2.23 is a possible long-term static support in the medium term having been tested twice in 2025 so far. Key upcoming releases for GBPNZD include New Zealand’s balance of trade on Monday, 20 October, and most importantly, British inflation on Wednesday, 22 October.

This article was submitted by Michael Stark, financial content leader at Exness.

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The opinions here are personal to the writer: they do not represent the opinions of Exness or FX Empire. This is not a recommendation to trade.