GBP/USD Forecast: Dollar Dips after Inflation Data, 30-Year Bond Auction Next

June 11, 2025 - Written by Frank Davies

STORY LINK GBP/USD Forecast: Dollar Dips after Inflation Data, 30-Year Bond Auction Next

The US Dollar dipped sharply following the weaker-than-expected US inflation data.

The Pound to Dollar exchange rate (GBP/USD) jumped to 1.3550 before a retreat to 1.3525.

Key resistance remains towards 1.3600 with doubts whether the Pound can secure sufficient momentum. According to UoB GBP/USD is vulnerable to a slide to 1.3430 unless there is a break above 1.3580.

A sustained move above 1.3600, however, would trigger speculation over more gains.

Markets moved to price in a larger potential for a September Fed rate cut and there will be expectations of another barrage of Fed criticism from President Trump.

Traders are already sensitive over the risk of a pro-administration appointment for the next Fed Chair.

There was limited reaction to the UK spending review. The substantial front-loading of spending in this parliament was confirmed with health and defence spending securing strong gains, while other departments will suffer.


The current market dynamics were illustrated by the fact that US inflation data had a much bigger impact on UK yields with the 10-year yield sliding to near 4.55% from above 4.60%.

According to ING; "The take-away for markets today will simply be confirmation that there is very little fiscal headroom."

Overnight, it was reported that the US and Chinese negotiators have produced a framework for implementing the details of an agreement that had been previously agreed in May

Trump stated that a final deal had been reached with tariffs on Chinese imports at 55% and Chinese tariffs on US imports at 10%, although there was still confusion over the figures.

Commonwealth Bank of Australia Currency Strategist Carol Kong commented; "It will still be very hard and it will take a long time for both sides to reach a comprehensive trade agreement. That sort of comprehensive deal usually takes years to be reached, so I'm skeptical that a framework reached at the meeting in London will be comprehensive. Tensions might be de-escalated for now, but they will certainly escalate again in coming months."

Markets are likely to be disappointed that tariffs on Chinese imports will be 55% despite limited immediate reaction.

US consumer prices increased 0.1% for May compared with consensus forecasts of 0.2% with the year-on-year increase at 2.4% from 2.3% and slightly below expectations of 2.5%.


Core prices increased 0.1% on the month compared with expectations of 0.3% with the annual increase held at 2.8%.

Markets still expect no Fed rate cut in June and July, but with increased expectations of a September cut.

Scotiabank the release of the US Federal Budget Balance will likely sharpen the market’s focus on the USD’s longer-term issues.

According to ING; “A soft 3-year Treasury auction reversed some recent gains in US government bonds, which now face a dual test today with the highly watched 10-year auction.”

MUFG added; “The results were weak enough to keep the markets nervous ahead of the USD 39bn worth of 10-year paper auctioned this evening and USD 22bn worth of 30-year tomorrow. Nervousness around the 30-year auction could be particularly high given the signs of investors steering clear of longer-dated paper due to both inflation and debt sustainability concerns.”

MUFG also noted suggestions that the Budget Bill would be amended in the Senate.

It added; “Some element of sense prevailing in the Senate in pushing back on this bill would certainly help reduce some of the current negative US dollar sentiment.”

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