Pound Sterling recovers against US Dollar amid increase in dovish Fed bets

The Pound Sterling bounces back against its major currency peers, recovering some of the previous day’s losses.
A higher-than-expected number of BoE members supporting an interest rate cut on Thursday weighed on British currency.
The US Dollar retraces as soft US labor market data supports dovish Fed bets.

Sagar Dua FXStreet

The Pound Sterling (GBP) regains ground against its major currency peers on Friday after a sharp fall the previous day, which was driven by the Bank of England’s (BoE) signal that there is a high chance of an interest-rate cut in the near term.

In the monetary policy announcement on Thursday, the BoE unanimously decided to leave interest rates unchanged at 3.75%, with a 5-4 vote split. The BoE was widely expected to maintain the status quo, but the number of Monetary Policy Committee (MPC) members supporting keeping rates unchanged was lower than the seven expected by markets.

Regarding the monetary policy outlook, the BoE reiterated that the policy will remain on a “gradual downward path”, while expressing confidence that inflationary pressures will return to the 2% target “ahead of the schedule expected in November”. Governor Andrew Bailey refrained from setting a timeframe for the next interest-rate cut and declined to endorse 3.25% as a terminal rate, a level that neither restricts nor stimulates economic growth.

Still, markets quickly priced in a higher likelihood of a near-term cut. The Pound Sterling lost 0.8% on the day against the US Dollar (USD), with the GBP/USD pair touching a two-week low.

In Friday’s session, investors will pay close attention to BoE Chief Economist Huw Pill’s comments in a National MPC Agency briefing scheduled at 12:00 GMT for further details about the BoE's interest-rate outlook. Pill was one of five MPC members who voted to leave interest rates unchanged on Thursday.

Pound Sterling 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 US Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.13%	-0.29%	-0.02%	-0.11%	-0.44%	-0.41%	0.00%
EUR	0.13%		-0.17%	0.11%	0.01%	-0.31%	-0.30%	0.12%
GBP	0.29%	0.17%		0.28%	0.18%	-0.15%	-0.13%	0.29%
JPY	0.02%	-0.11%	-0.28%		-0.09%	-0.42%	-0.41%	0.01%
CAD	0.11%	-0.01%	-0.18%	0.09%		-0.34%	-0.32%	0.11%
AUD	0.44%	0.31%	0.15%	0.42%	0.34%		0.02%	0.44%
NZD	0.41%	0.30%	0.13%	0.41%	0.32%	-0.02%		0.42%
CHF	0.00%	-0.12%	-0.29%	-0.01%	-0.11%	-0.44%	-0.42%

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).

Daily Digest Market Movers: Investors shift focus to US NFP data

The Pound Sterling trades 0.35% higher to near 1.3580 against the US Dollar (USD) during the European trading session on Friday. The GBP/USD pair recovers after posting a fresh weekly low near 1.3500.
A slight corrective move in the US Dollar after a week-long rally has also supported the pair. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is down 0.15% to near 97.80.
The US Dollar has come under pressure as traders have raised bets supporting an interest rate cut by the Federal Reserve (Fed) at its Marchmonetary policy meeting. According to the CME FedWatch tool, the possibility of the Fed reducing interest rates next month by 25 basis points (bps) to 3.25%-3.50% has advanced to 22.7% from the 9.4% seen on Monday.
Dovish Fed prospects have increased after the latest batch of United States (US) job market-related data showed continued weakness in the labor demand. The US JOLTS Job Openings report for December showed on Thursday that employers posted lower job vacancies – at 6.542 million against 6.928 million in November.
ADP reported on Wednesday that the private sector created 22K jobs in January, less than the 37K added in December.
For more cues on the current state of the US labor market, investors will focus on the Nonfarm Payrolls (NFP) data for January, which will be released on Wednesday.

Technical Analysis: GBP/USD revisits 20-day EMA

GBP/USD gains to near 1.3580 as of writing. The 20-day Exponential Moving Average (EMA) has softened to 1.3591 after a steady ascent, with price holding just beneath it and dampening immediate upside traction.

The 14-day Relative Strength Index (RSI) at 50 (neutral) confirms waning momentum from prior overbought readings.

The flattening 20-day EMA signals consolidation in the near term, though its elevated level still frames the upward trend bias. A decisive daily close back above 1.3591 could extend gains toward the February 4 high of 1.3733, while repeated rejection would keep the pair range-bound.

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

Economic Indicator

JOLTS Job Openings

JOLTS Job Openings is a survey done by the US Bureau of Labor Statistics to help measure job vacancies. It collects data from employers including retailers, manufacturers and different offices each month.

AUD/USD turns lower toward 0.7000 after mixed Australian jobs data

AUD/USD is losing ground toward 0.7000 in the Asian session on Thursday, following the release of the Australian August jobs report, which showed that the Unemployment Rate rose to 4.6% versus 4.5% expected, while Employment Change beat estimates, arriving at 39.5K. Traders also remain unnerved ahead of the critical Trump-Xi meeting.

USD/JPY keeps the red near 158.00 as Japanese Yen firms up

USD/JPY retreats from three-week highs and holds losses near 158.00 in the Asian session on Thursday. Surging Japanese bond yields lift the Yen amid looming intervention risks, while the US Dollar preserves overnight gains to a two-month high amid hawkish Fed bets and elevated US bond yields.

Gold struggles near one-week low as traders await Trump-Xi meeting amid Fed hike bets

Gold sticks to a negative bias for the second straight day, trading below the $4,300 mark or a one-week low during the first half of the European session as traders await a crucial meeting between US President Donald Trump and his Chinese counterpart Xi Jinping. Expectations for a major announcement are low, though market players will look for any progress on rare earths, technology restrictions, and an extension of the current US-China truce.

Bitcoin slips to $84,000 on rate hike bets – Worldcoin, Pepe lead losses

Bitcoin (BTC) price trades below $84,000 on Thursday, extending losses after a 2% decline the previous day. The pullback aligns with renewed inflation and rate-hike concerns, as US composite and services PMIs rose to 58.4 and 58.7 in September. Worldcoin (WLD) and Pepe (PEPE) recorded double-digit losses over the last 24 hours, emerging as the worst performers.

SNB leaves interest rates unchanged at 0%

Swiss National Bank leaves its key policy rates unchanged at 0%, as expected by market particiapnts. The key highlights of SNB’s monetary policy assessment are as followed: Banks' sight deposits held at the SNB will be remunerated at the SNB policy rate up to a certain threshold. SNB sees 2026 inflation at 0.7% (previous forecast was for 0.6%). The main risk to the economic outlook for Switzerland stems from developments in the global economy.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.