GBP/USD extends drop after UK data, down 0.3% to 1.3302

The GBP/USD pair extended its decline to 1.3302 on March 13, 2026, a 0.3% drop from recent levels, as UK economic data and geopolitical tensions weighed on sterling. The British pound has weakened 2.20% over the past month, trading near three-month lows amid concerns about inflationary pressures driven by the Middle East conflict and surging oil prices, which briefly topped $100 per barrel. The International Energy Agency's plan to release strategic oil reserves has provided limited relief, as supply disruptions persist.

Money markets now price in a greater than 50% chance of a 25-basis-point rate hike by the Bank of England (BoE) in December 2026, reflecting heightened inflation risks. This contrasts with earlier expectations of no rate changes, underscoring shifting monetary policy dynamics. Meanwhile, the U.S. Federal Reserve's tightening trajectory remains a key support for the dollar, with markets anticipating minimal easing in 2026.

Technical analysis highlights a bearish outlook for GBP/USD, with the pair trading below its 50-day exponential moving average and failing to reclaim the 1.3500 psychological level. The 1.3300 zone has emerged as critical support, with a break below this level potentially extending losses toward 1.3255.

Investors will closely watch UK monthly GDP data due on Friday, along with BoE Governor Andrew Bailey's comments, for further clues on policy direction. For now, the pound remains vulnerable to dollar strength and persistent energy-market volatility.