Sterling Falls More Than 0.40% to 1.3396 as U.S. Inflation Data Released
Key Facts
Sterling fell more than 0.40% against the dollar during Tuesday’s session on November 10, 2026, with GBP/USD reaching 1.3396 at the time FXStreet published its report. The move followed the release of U.S. consumer price data for October, which showed the headline index rising 0.4% month over month. FXStreet cited the CME FedWatch tool as putting the probability of a 25-basis-point U.S. rate increase at 85%, versus a 14% chance of a 50-basis-point increase. These probabilities reflect the market pricing reported in the article, while the larger increase scenario remained conditional on a statement by a Federal Reserve official. In the UK, retail sales data came in below the report’s expectations, adding a domestic backdrop to currency pressures.
The Consumer Price Index for All Urban Consumers rose 0.4% in October, following a 0.6% increase in September, according to the U.S. Bureau of Labor Statistics. The slower monthly pace indicates a deceleration in the headline index from the previous month, but did not prevent sterling from falling in the session after the data release. The index excluding food and energy rose 0.3% in October, the same rate recorded in September and August. Monthly core inflation therefore remained steady at the same rate for three consecutive months. The figures show two different trends in the report: a slowdown in the headline index and continued monthly growth in the core index at an unchanged pace over that period.
An increase in shelter was among the leading components of October’s reading: its index rose 0.3% and accounted for more than 30% of the monthly increase in the headline index, according to the Bureau of Labor Statistics. The food index rose 0.5% during the month, while energy prices increased 0.7%. These components provide a breakdown of the sources of the monthly increase, while the headline index remained below September’s rate. The report did not give a year-over-year figure for the October 2026 index for series whose calculations were impeded by the absence of October 2025 data. The bureau said a funding lapse had prevented it from collecting survey data that month, so it did not publish 12-month changes for the affected series.
FXStreet’s report linked the currency move to the inflation reading and to Christopher Waller’s comments on the size of an increase he might support. Waller said he would support a 25-basis-point hike if the October reading showed improvement, while he might support a 50-basis-point increase if the reading matched the previous two. According to the tool cited by the report, the probability of the smaller increase was 85% and that of the larger increase was 14% after Waller’s remarks. These figures show that the 50-basis-point possibility was presented as a conditional scenario, not as a confirmed increase in market expectations. GBP/USD fell to 1.3396 during the session as the inflation data were released and those probabilities were being discussed.
On the UK side, like-for-like retail sales rose 1.1% year over year in October, compared with 1% in the previous month, but came in below the 1.2% forecast, according to FXStreet. This provided a weaker-than-expected backdrop for UK data on a day when market attention was focused on U.S. inflation. The Bank of England had raised its key interest rate by 0.25 percentage point to 4% at its meeting ending November 4, with one member voting for a 0.5-percentage-point increase to 4.25%. The bank said UK consumer price inflation was 3.5% in September and forecast that it would rise to about 5% by the middle of next year. These domestic factors place sterling’s move in an economic context that includes below-forecast retail sales and a recent UK monetary policy path.
Attention in the UK is turning to the preliminary estimate of third-quarter gross domestic product, scheduled for release on November 12 at 7 a.m. local time, according to the Office for National Statistics calendar. FXStreet’s report estimated that the UK economy grew 0.7% quarter over quarter in the third quarter. In the United States, the October Producer Price Index is scheduled for release on Friday, November 13, at 8:30 a.m. Eastern time, according to the Bureau of Labor Statistics. The U.S. index release follows the consumer price reading, which showed a monthly increase of 0.4% in the headline index and 0.3% in the core index. The upcoming release dates place UK activity data and U.S. producer prices among the next events on the week’s calendar.