British Pound edges higher above 1.3500 ahead of US jobs report

The GBP/USD pair gathers strength to near 1.3530 during the early Asian trading hours on Friday. The British Pound (GBP) edges higher against the US Dollar (USD) following hawkish remarks from a Bank of England (BoE) policymaker. Traders will closely monitor the release of the US August employment report later on Friday. 

Bank of England (BoE) Chief Economist Huw Pill said on Thursday that raising interest rates now would help reduce the chance that the central ‌bank has to be more aggressive in future to tame inflation, which has picked up as a result of the Iran war.

"Raising Bank Rate ... need not be the start of a prolonged and aggressive series of increases," said Pill. 

Traders in interest rate futures on Thursday priced the probability of a 25 basis points (bps) rate hike at the next meeting this month at little more than 15%, although that chance rose to more than 70% for the subsequent meeting in November.

The US employment report for August will be in the spotlight later in the day. This report could offer some hints about the US interest rate outlook. Nonfarm Payrolls (NFP) are projected to increase by 56,000 in August. The Unemployment Rate is estimated to remain unchanged at 4.1% during the same period. 

“Monthly payrolls readings have been softer in recent months, but low jobless claims and a steady unemployment rate have kept Fed officials unconcerned about the labor market,” said Citigroup economist Andrew Hollenhorst.

BoE November meeting in focus as UK-US spreads stay supportive

Strategists at Scotiabank highlight that market attention is already shifting toward the BoE’s early November gathering, noting that “the November 5th meeting is priced for 18bpts and is also an Inflation Report/forecast meeting and thus should provide for a more fulsome analysis as it will also follow the government’s Autumn Statement/budget scheduled for October 28th.” They add that “UK-US yield spreads remain supportive following this week’s surge,” reinforcing the current backdrop for the Pound even as near-term policy expectations are only modestly recalibrated.

BoE’s Pill leans hawkish with call for prompt rate hike

Pill’s latest speech scores 8.2 on FXS Speechtracker, modestly above the historic 7.9 average, signalling a slightly stronger-than-usual policy signal. The explicit call to raise Bank Rate to 4% and the emphasis on prompt, decisive action to head off second-round effects mark a clear hawkish tilt, even as Pill stresses this need not launch a prolonged or aggressive hiking cycle.

By warning that ‘fine-tuning’ rates amid energy-price uncertainty is problematic and that second-round effects may now be stronger than in the ‘halcyon days’ of inflation targeting, Pill reinforces a bias toward front-loaded tightening. For GBP, the combination of a concrete rate level, a preference for early action, and resistance to extreme ‘what if’ scenarios supports expectations of a near-term hike while tempering bets on an extended series of increases.

Technical Analysis: GBP/USD

In the daily chart, GBP/USD holds a mildly bullish bias as it trades above the 100-day Simple Moving Average (SMA) and the lower Bollinger Band, keeping the recent uptrend structure intact despite a shallow pullback from recent highs. The Relative Strength Index (RSI) around 52 leans slightly positive, suggesting upside pressure is consolidating rather than reversing, though price is now stalling just under the Bollinger mid-line, hinting at near-term congestion.

On the topside, immediate resistance emerges at the Bollinger middle band around 1.3555, with the upper Bollinger Band near 1.3660 acting as the next hurdle if buyers regain control. On the downside, initial support is seen at the lower Bollinger Band near 1.3450, followed closely by the 100-day SMA at 1.3445, where a break would expose a deeper correction and dent the current constructive tone.

(The technical analysis of this story was written with the help of an AI tool. Know more.)