- GBP/USD holds above 1.2500, lacks firm direction.
- UK Unemployment Rate 3M to July came in at 4.3% from 4.2% in the previous reading.
- Higher for longer interest rate narrative in the US boosts the US Dollar.
- Investors will monitor the monthly UK GDP report and US Consumer Price Index (CPI) on Wednesday.
The GBP/USD pair consolidates its recent losses above the 1.2500 area during the early European trading hours on Tuesday. The major pair currently trades near 1.2515, up 0.04% on the day.
The latest data UK’s Office for National Statistics revealed that the UK Unemployment Rate in the three months to July came in at 4.3% from 4.2% in the previous reading, in line with the market consensus. Meanwhile, Employment Change for July declined by 207K from a 66K drop in the previous reading, worse than the estimated 185K drop. The Average Earnings Including Bonus in the three months to July rose by 8.5% versus 8.2% prior. Excluding bonus, the figure remains at 7.8%, as expected.
Catherine Mann, a Bank of England (BoE) policymaker, stated on Monday that it was too early for the central bank to pause interest rates and that it was preferable for the central bank to err on the side of raising them too high rather than halting too soon. The hawkish comment by BoE policymakers might limit the downside for the British Pound and act as a tailwind for GBP/USD.
Across the pond, the higher for longer interest rate narrative in the US lifts the US Dollar (USD) against the GBP The markets have been priced in the possibility of a 92% chance of a rate hold at the September meeting and a 42.4% chance of a rate hike at the November meeting, according to the CME FedWatch Tool.
US Treasury Secretary Janet Yellen said on Sunday that she is becoming more convinced that the US will be able to curb inflation without causing major impacts on the labor market. She added that every gauge of inflation is erasing and there was no massive wave of layoffs.
Market players will shift their focus to the monthly UK GDP report and Manufacturing Production for July due on Wednesday. Also, the highly anticipated US Consumer Price Index (CPI) data will be released in the North American session on Wednesday. Traders will find the trading opportunity around the GBP/USD pair.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD holds gains above 0.6400 as China weighs tariff exemptions
AUD/USD holds gains above the 0.6400 mark early Friday and remains well within striking distance of the YTD peak touched earlier this week. A positive risk tone and a report that China is mulling tariffs exemptions on some US imports act as a tailwind for the Aussie but fresh US Dollar strength could check the pair's upside.
USD/JPY looks to 144.00 as US Dollar rallies on US-China trade optimism
USD/JPY extends the advance toward 144.00 early Friday, with the latest leg up linked to intense US Dollar demand following a Bloomberg report, citing that China is considering suspending its 125% tariff on some US imports. The pair shrugs off hot Tokyo CPI inflation data.
Gold eyes US-China trade talks and third straight weekly gain
Gold price holds Thursday’s rebound, defending weekly gains near $3,350 early Friday. Gold buyers catch a breather, taking stock of the trade developments globally after US President Donald Trump’s tariffs whiplash.
Bitcoin, Ethereum and Ripple to consolidate strong weekly gains
Bitcoin price stabilizes around $93,000 on Friday, following a 9.5% rally so far this week. Ethereum and Ripple followed BTC’s move and rallied by 10% and 5%, respectively. However, these coins exhibit signs of bullish exhaustion on their momentum indicators.
Five fundamentals for the week: Traders confront the trade war, important surveys, key Fed speech Premium
Will the US strike a trade deal with Japan? That would be positive progress. However, recent developments are not that positive, and there's only one certainty: headlines will dominate markets. Fresh US economic data is also of interest.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.