- The GBP/USD pair is set to decline further, hovering around 1.3195 during the Asian trading session on Friday.
- The Bank of England (BOE) may lower bank fees from 4.25% to 4.0% next week.
- Trump has maintained a global tariff rate at a modest 10%.
During Friday’s Asian session, the GBP/USD exchange rate is expected to drop to approximately 1.3195. The Pound Sterling (GBP) is likely to face additional losses against the US dollar as the Bank of England (BOE) plans to lower rates next week. Investors are also awaiting the release of the US employment data for July, which includes the non-farm payroll (NFP) figures and unemployment statistics later in the day.
There is significant selling pressure on the pound, driven by rising cost concerns and a cooling labor market. At its May meeting, BOE policymakers reduced the benchmark rate by 25 basis points (bps), and analysts are anticipating a similar move on August 7th. According to reports, the money market places the likelihood of an 89% reduction in borrowing costs at the BOE in August.
In other news, President Donald Trump has introduced new tariff rates affecting various trading partners. The White House announced on Thursday that he would establish a baseline tariff rate of 10%. In addition, he signed an executive order that will increase Canadian tariffs from 25% to 35% effective August 1, 2025. The current tariff rate on Mexico has been extended for an additional 90 days to allow for continued trade negotiations.
All attention is focused on the upcoming US Employment Report, expected later on Friday. Economists project that job growth will slow to 110,000 new jobs in July, with the unemployment rate potentially rising to 4.2%. If these expectations fall short, it could have a short-term negative impact on the USD against the GBP.
