British Pound steadies despite strong US jobs data ahead of NFP
- Layoffs in the US hit a two-year low, reinforcing a solid labor-market backdrop.
- Hormuz uncertainty keeps geopolitics central before Friday’s NFP release.
- UK construction PMI improves, though sector remains in contraction territory.
The Pound Sterling (GBP) holds firm against the US Dollar (USD) during the North American session on Thursday, after US jobs data reinforces the thesis that the labor market remains solid ahead of Friday’s Nonfarm Payrolls report. The GBP/USD pair trades at 1.3466, after bouncing off daily lows of 1.3404.
GBP/USD holds near 1.3460 as jobless claims hit two-year lows
The US Department of Labor reported that Initial Jobless Claims for the week ending August 1 came in at 199K, exceeding the prior week’s print but below estimates of 202K. Earlier, the Challenger job cuts showed that planned layoffs tumbled 27% to 33.429K in July, its lowest level since July 2024.
Therefore, US economic data releases during the day suggest that the Federal Reserve (Fed) could remain laser-focused on tackling high inflation, which has so far remained five years above the 2% goal.
Eyes shift to Nonfarm Payrolls, which are expected to come at 80K, above June’s 57K print. Alongside this, the Unemployment Rate is projected to remain steady at 4.2%, below the Fed’s 4.5% target towards the end of 2026.
Meanwhile, geopolitics is expected to continue to drive the markets, as a possible deal between Iran and Oman could reopen the Strait of Hormuz. Nevertheless, an Iranian Journalist reported that the intermediary contact between the US and Iran is false and that Iran-Omani negotiations set the rules for sailing through the Strait of Hormuz.
Recently, the details of the Iran-Oman deal had leaked, and according to the draft, vessels belonging to the US, Israel and hostile countries, through Hormuz, will be prohibited.
In the UK, the S&P Global Construction PMI rose to 44.7 last month from June’s 38.4, showing an improvement despite the ongoing slowdown in the sector, as builders turned more optimistic since the pre-Middle East war.
GBP/USD Price Forecast: Technical outlook
In the daily chart, GBP/USD trades at 1.3458, maintaining a mildly bullish near-term bias as spot holds above the reclaimed descending trend line around 1.3441 and the clustered 50/100/200-day simple moving averages (SMA) near 1.3365. Price also sits comfortably over the higher rising trend support drawn from 1.3140 around 1.3316, while the Relative Strength Index (RSI) at 56.7 stays above the neutral 50 line, hinting that upside momentum is still constructive though not overstretched.
On the topside, initial resistance emerges at the descending trend line from 1.3653, now intersecting near 1.3523, ahead of the higher upward-sloping trend barrier around 1.3554, where buying pressure could start to fade. On the downside, immediate support is seen at the prior resistance trend line turned floor around 1.3441, followed by the multi-period SMA cluster near 1.3365 and then the lower rising trend support around 1.3316, where bulls would be expected to defend the broader constructive structure.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
(This story was corrected on August 6 at 16:35 GMT to say that US layoffs hit a two-year low in July, not Initial Jobless Claims.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Author
Christian Borjon Valencia
FXStreet
Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.
