- GBP/USD edges up 0.19% as the dollar weakens despite stronger-than-expected US GDP.
- Jobless claims dipped to 229K, while NFP revisions signaled a cooling labor market with slower job growth.
- UK inflation pressures linger as producer prices reach a two-year high, reinforcing expectations that the BoE will hold rates steady.
GBP/USD gained during the North American session after fresh US data signaled ongoing economic strength, reducing expectations for an imminent rate cut. At the time of writing, the pair traded at 1.3524, up 0.19% on the day.
The pound strengthened as second-quarter US GDP beat expectations, expanding 3.1% and revised higher to 3.3% from the initial estimate. This rebound follows a 0.5% contraction in Q1, according to the Bureau of Economic Analysis. The data suggest the US economy is set to grow at a moderate pace, even as businesses and households adapt to the administration’s trade policies.
Labor market figures painted a mixed picture. Initial jobless claims for the week ending August 23 slipped to 229K, slightly below forecasts of 230K and lower than the prior week’s 234K. However, earlier Nonfarm Payroll revisions showed that job creation slowed notably, averaging just 35K new jobs per month over the past three months compared with 123K in the same period of 2024.
In the UK, inflationary pressures remained firm. Producer prices rose 1.9% year-on-year, the highest in two years, reinforcing expectations that the Bank of England (BoE) will keep rates unchanged at 4.25%. Market pricing suggests steady policy remains the baseline outlook.
Looking ahead, traders will focus on the release of the Federal Reserve’s preferred inflation gauge and the provisional goods trade balance. Political developments, including the dismissal of Fed Governor Lisa Cook by President Trump, may also add volatility.
GBP/USD Technical Outlook
GBP/USD extended its three-day rally, climbing above the 50-day SMA at 1.3494 and reclaiming the 1.3500 handle. A daily close above this zone would open the door toward 1.3550 and the August 14 swing high at 1.3594, with 1.3600 in sight.
Conversely, a drop back under 1.3500 and 1.3494 could expose the 100-day SMA at 1.3442. Sustained weakness may then drive the pair toward the 1.3400 level.
