Select Language

GBP/USD slides closer to mid-1.3200s, downside seems limited ahead of BoE this week

Breaking news

GBP/USD slides closer to mid-1.3200s, downside seems limited ahead of BoE this week

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2025.08.04 09:52
GBP/USD slides closer to mid-1.3200s, downside seems limited ahead of BoE this week

update 2025.08.04 09:52

  • GBP/USD kicks off the new week on a softer note as the post-NFP USD selloff seems to have abated.
  • September Fed rate cut bets and concerns about the central bank's independence might cap the USD.
  • Traders might refrain from placing aggressive bets ahead of the key BoE policy meeting on Thursday.

The GBP/USD pair struggles to capitalize on Friday's solid bounce from the 1.3140 area, or its lowest level since May 12, and kicks off the new week on a softer note. Spot prices currently trade around the 1.3265-1.3260 region, though the downside seems limited as traders might refrain from placing aggressive directional bets ahead of the Bank of England (BoE) meeting later this week.

The UK central bank is widely expected to cut interest rates by 25 basis points (bps) to 4% on Thursday amid concerns around job market prospects. In fact, the UK labour market has weakened recently, and pay growth has cooled more quickly than the BoE's May forecast. However, signs of still sticky inflation suggest that the committee is likely to remain cautious. Nevertheless, the outlook will play a key role in influencing the British Pound (GBP) and provide some meaningful impetus to the GBP/USD pair.

In the meantime, a modest US Dollar (USD) bounce following Friday's dismal US Nonfarm Payrolls (NFP)-inspired slump turns out to be a key factor weighing on spot prices during the Asian session. The upside for the USD seems limited amid the growing acceptance that the Federal Reserve (Fed) will resume its rate-cutting cycle in September. The bets were lifted by a miss in the headline US NFP and a sharp downward revision of June's job growth, which underlines a significant deterioration in the jobs market.

Meanwhile, US President Donald Trump stepped up his extraordinary attacks on Fed Chair Jerome Powell and called on the board to wrest control of the central bank and lower interest rates. This adds to concerns about the central bank's independence, which might hold back the USD bulls from placing aggressive bets and limit the downside for the GBP/USD pair heading into the key central bank event. However, last week's breakdown below the 100-day Simple Moving Average (SMA) was seen as a key trigger for bears.

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.


Date

Created

 : 2025.08.04

Update

Last updated

 : 2025.08.04

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

Japan's Akazawa: US-Japan trade deal isn't a legally binding commitment

Japanese Economy Minister and chief trade negotiator,Ryosei Akazawa, said on Monday that the lastest announced trade agreement between the United States (US) and Japan is not a legally binding commitment.
New
update2025.08.04 12:29

Silver Price Forecast: XAG/USD flat lines around $37.00; bearish potential seems intact

Silver (XAG/USD) struggles to capitalize on Friday's modest recovery gains and oscillates in a range at the start of a new week as softer US NFP-inspired US Dollar (USD) selling now seems to have abated.
New
update2025.08.04 12:19

USD/CAD struggles near 1.3750 due to improved Oil prices

USD/CAD remains subdued for the second successive session, trading around 1.3770 during the Asian hours on Monday. The pair faces challenges as the commodity-linked Canadian Dollar (CAD) receives support from the slight increase in crude Oil prices.
New
update2025.08.04 12:13

Japanese Yen drifts lower as USD stalls Friday's softer US NFP-inspired steep decline

The Japanese Yen (JPY) attracts some sellers at the start of a new week and stalls its sharp recovery move from a four-month low touched against its American counterpart on Friday.
New
update2025.08.04 11:55

Australian Dollar remains steady following TD-MI Inflation Gauge data

The Australian Dollar (AUD) advances against the US Dollar (USD) on Monday, extending its gains for the second successive trading day. The AUD/USD pair gained ground following the release of Australia's inflation gauge data.
New
update2025.08.04 11:48

NZD/USD softens to near 0.5900 ahead of China's trade deadline 

The NZD/USD pair tumbles to near 0.5915 during the Asian trading hours on Monday. Tariff uncertainty between the United States (US) and China weighs on the China-proxy Kiwi. The downside might be limited due to a dismal US jobs report and rising September Federal Reserve (Fed) rate cut bets.
New
update2025.08.04 11:14

EUR/USD falls to near 1.1550 despite a dovish tone surrounding Fed policy outlook

EUR/USD depreciates after registering around 1.5% gains in the previous session, trading around 1.1560 during the Asian hours on Monday. The pair loses ground as the US Dollar (USD) recovers its losses of the prior trading day.
New
update2025.08.04 10:24

WTI tumbles to below $66.50 after OPEC+ agrees to another bumper output boost

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $66.35 during the early Asian trading hours on Monday. The WTI edges lower after the Organization of Petroleum Exporting Countries and allies (OPEC+) approved another increase in oil production, raising oversupply concerns.
New
update2025.08.04 10:18

PBOC sets USD/CNY reference rate at 7.1395 vs. 7.1496 previous

On Monday, the People's Bank of China (PBOC) set the USD/CNY central rate for the trading session ahead at 7.1395 as compared to Friday's fix of 7.1496 and 7.1774 Reuters estimate.
New
update2025.08.04 10:15

GBP/USD slides closer to mid-1.3200s, downside seems limited ahead of BoE this week

The GBP/USD pair struggles to capitalize on Friday's solid bounce from the 1.3140 area, or its lowest level since May 12, and kicks off the new week on a softer note.
New
update2025.08.04 09:51

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel