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GBP/USD jumps as BoE delivers hawkish cut, US jobless claims climb

  • Bank of England cuts rates to 4% in 5–4 vote, signaling careful easing pace.
  • Hawkish tone in BoE statement pushes GBP/USD above 1.3400 for first time in a week.
  • US jobless claims rise to highest level since 2021, fueling Dollar weakness.

The GBP/USD surges during the North American session, though trading below an eight-day high reached at 1.3436 after the Bank of England (BoE) decided to cut interest rates on a close vote split, signaling that policymakers remained worried about inflation. Also, a jump in unemployment claims in the United States (US) keeps the Dollar pressured. The pair trades at 1.3410, up 0.48%.

Sterling rallies near 1.3436 as BoE split hints caution on inflation; weak US data dents Dollar momentum

Earlier, the BoE cut rates on a 5-4 vote split to 4%, as four members of the BoE’s Monetary Policy Committee (MPC) voted to hold rates unchanged, while Taylor wanted a 50-bps rate cut. In its monetary policy statement, the BoE revealed that “a gradual and careful approach” to further cuts on the Bank Rate, but added that “The restrictiveness of monetary policy had fallen as Bank Rate had been reduced.”

BoE’s decision exerts pressure on Chancellor Rachel Reeves, who is expected to hike taxes in a budget statement toward the end of 2025, to meet her targets for fixing public finances.

In what was perceived as a “hawkish cut,” the GBP/USD surged past the 1.3400 figure and hit a weekly peak of 1.3436, before retreating somewhat to the 1.34 figure.

Across the pond, Initial Jobless Claims for the week ending August 2, rose by 228K above estimates of 221K and the prior print of 218K. However, what grabbed economists' attention was that Continuing Claims rose to 1.97 million in the week ended July 26, hitting its highest level since November 2021.

Although the data was negative, money market futures data show that traders are expecting at least 58 basis points (bps) of easing by the Federal Reserve by year-end.

The data initially weighed on the Dollar, which so far has recovered some ground, on breaking news that the Trump administration is considering current Fed Governor Christopher Waller to become the next Fed Chair.

The US Dollar Index (DXY), which tracks the performance of the buck’s value against a basket of its peers, is up 0.15% at 98.34. The news drove the GBP/USD from around 1.3430 to 1.3410.

In the meantime, Atlanta’s Fed President Raphael Bostic reiterated his view that one cut is appropriate for this year but added that there is a lot of data before the next meeting.

GBP/USD Price Analysis: Technical outlook

After conquering 1.3400, the GBP/USD is neutral but skewed to the upside, but key resistance emerges at the 50-day SMA, standing at the 1.3500 figure. If surpassed, buyers' next target would be 1.3600.

Conversely, a daily close below 1.3400 could cap the GBP/USD advance, keeping the pair range-bound within the 100-day SMA at 1.3351 and the 1.3400 mark. If sellers break the bottom of the range, expect a drop to 1.33 and below.

British Pound PRICE Today

The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Euro.

USDEURGBPJPYCADAUDNZDCHF
USD0.22%-0.45%0.04%0.11%0.05%-0.12%0.17%
EUR-0.22%-0.67%-0.17%-0.12%-0.18%-0.39%-0.06%
GBP0.45%0.67%0.51%0.58%0.52%0.29%0.64%
JPY-0.04%0.17%-0.51%0.06%0.04%-0.21%0.18%
CAD-0.11%0.12%-0.58%-0.06%-0.05%-0.29%0.08%
AUD-0.05%0.18%-0.52%-0.04%0.05%-0.21%0.15%
NZD0.12%0.39%-0.29%0.21%0.29%0.21%0.37%
CHF-0.17%0.06%-0.64%-0.18%-0.08%-0.15%-0.37%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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