GBP/USD climbs past 1.33 on BoE hawkish cut, US-UK reaching trade deal

• BoE cuts rates to 4.25% with a divided vote; two members supported no change, seen as a hawkish signal.
• Trump and Starmer announce US-UK trade deal, boosting GBP/USD despite upbeat US jobless claims data.
• Fed likely to stay on hold as Powell cites dual mandate risks; jobless claims drop to 228K.

The Pound Sterling advanced during the North American session after the Bank of England (BoE) reduced borrowing costs on a 7-2 vote split, with two members voting to hold rates unchanged. Positive US jobs data failed to propel the Greenback, while a trade deal between the US and the UK is a tailwind for the GBP/USD, which trades at 1.3300, up 0.15%.

GBP/USD rises after BoE's three-way vote signals caution and Trump-Starmer pact adds bullish tailwind

The BoE reduced rates to 4.25% on Thursday, as expected, in what was perceived as a hawkish cut due to the three-way vote split, with two members voting for a 50-basis-point cut, five for a 25-basis-point cut, and two more to keep rates at 4.50%.

This propelled Cable higher, although an announcement of a trade deal between the US and the UK supported the GBP/USD in remaining above the 1.33 handle.

Recently, US President Donald Trump and UK Prime Minister Keir Starmer held a call during which they praised each other for reaching a deal that would be mutually beneficial for both countries.

"It opens up a tremendous market for us," Trump said of the agreement.

Aside from this, the number of Americans filing for unemployment claims edged lower, as reported by the US Department of Labor. Initial Jobless Claims for the week ending May 3 rose by 228,000, down from the 230,000 expected and less than the previous reading of 241,000.

The data justified the Federal Reserve's (Fed) decision to keep rates on hold on Wednesday despite Fed Chair Jerome Powell stating that the dual mandate risks of maximum employment and price stability have heightened. Today's jobs data suggest that the central bank may continue to keep rates on hold and wait to see if inflation remains within the 2% threshold or rises primarily due to tariffs.

GBP/USD Price Forecast: Technical outlook

The GBP/USD uptrend is in question as price action depicts three successive days of reaching lower highs and lower lows, an indication that buyers are losing steam. Momentum-based indicators like the Relative Strength Index (RSI) at 58.14, reached their lowest level since mid-April, indicating that sellers are stepping in.

For a bullish continuation, the GBP/USD needs to clear the 1.3400 figure. A breach of the latter will expose the year-to-date (YTD) high of 1.3443, followed by 1.3500. Conversely, a drop below 1.3300 could clear the path to test 1.3250 followed by the 1.3200 figure.