On Friday, the British pound (GBP) remained steady against the US dollar (USD) at about 1.3470. This stability indicates some weakness in the UK currency, particularly as the US dollar index (DXY) experiences some selling pressure.
The performance of the pound has been lacking, driven by renewed expectations that the Bank of England (BoE) might lower interest rates again this year. These concerns grew following the release of UK employment figures for the three-month period ending in August.
The data revealed an uptick in unemployment and a slowdown in wage growth. Specifically, the unemployment rate rose to 4.8%, marking the highest rate since March 2021.
Traders are anticipating a reduction in interest rates by around 46 basis points (bps) by year-end, according to market consensus.
However, Katherine Mann, a prominent member of the central bank’s Monetary Policy Committee (MPC), is not in favor of additional rate cuts. She voiced her opposition, indicating that the deterioration in the labor market is gradual, not drastic. “The reality is that the labor market is easing slowly, but it’s not falling off a cliff,” Mann remarked at a Washington event, as reported by Reuters.
On the fiscal side, UK Chancellor of the Exchequer Reeves stated that there are no plans to increase wealth tax in the upcoming autumn budget due next week. Yet, she pointedly mentioned that tax hikes and cuts to public spending are likely to occur.
GBP price today
The table below displays the percentage change of the British Pound (GBP) against major currencies today. The GBP was notably the weakest against the Swiss franc.
| USD | EUR | GBP | JPY | CAD | Australian Dollar | New Zealand Dollar | Swiss Franc | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.11% | 0.02% | -0.43% | -0.06% | 0.30% | 0.00% | -0.45% | |
| EUR | 0.11% | 0.15% | -0.33% | 0.08% | 0.47% | 0.12% | -0.34% | |
| GBP | -0.02% | -0.15% | -0.44% | -0.11% | 0.30% | -0.04% | -0.53% | |
| JPY | 0.43% | 0.33% | 0.44% | 0.35% | 0.76% | 0.40% | -0.05% | |
| CAD | 0.06% | -0.08% | 0.11% | -0.35% | 0.37% | 0.06% | -0.44% | |
| Australian Dollar | -0.30% | -0.47% | -0.30% | -0.76% | -0.37% | -0.35% | -0.79% | |
| New Zealand Dollar | -0.01% | -0.12% | 0.04% | -0.40% | -0.06% | 0.35% | -0.50% | |
| Swiss Franc | 0.45% | 0.34% | 0.53% | 0.05% | 0.44% | 0.79% | 0.50% |
The heat map illustrates the percentage changes among major currencies. The base currency is selected from the left column, while the quote currency is selected from the top row. So, when you analyze British Pounds against US Dollars, the percentage change displayed represents GBP (Base)/USD (Quote).
Daily Digest Market Trends: GBP shows mixed performance against peers
- The U.S. dollar faces pressure amid trade tensions with China and a potential dovish shift in the Federal Reserve’s stance for the remaining year.
- Currently, the US Dollar Index (DXY), which gauges the dollar’s strength against six key currencies, is hovering near a ten-day low around 98.10.
- Strained trade relations ensued after the U.S. government imposed 100% tariffs on Chinese imports in response to export restrictions from Beijing on rare earth minerals.
- Nonetheless, the upcoming meeting between US President Trump and Chinese leader Xi Jinping in South Korea seems to be on track. U.S. Treasury Secretary Scott Bessent noted: “We are working towards a meeting, and President Trump will continue to engage with Mr. Xi.” He emphasized that the U.S. doesn’t wish to “decouple with China” but cannot allow “Chinese bureaucrats to control supply chains globally.”
- World leaders have voiced concerns regarding China’s rare earth export restrictions. “China’s decisions regarding these exports are misguided and could harm the global economy,” stated Rachel Reeves, British finance minister, recently. “We support increased focus from the Group of Seven on securing our critical minerals.”
- Additionally, worries regarding the U.S. labor market have ramped up expectations for the Federal Reserve, with many anticipating a cut of more than 50 basis points (bps), which may further diminish the dollar’s value. Insights from CME’s FedWatch tool indicate that traders are expecting at least a 50 basis point (bp) cut this year, with a 19.6% likelihood for a 75 basis point cut.
Technical analysis: GBP consolidates around 1.3470
As of Friday, the pound was trading at 1.3470 against the US dollar. The GBP/USD pair has struggled to gain traction above the 20-day exponential moving average (EMA) around 1.3423.
The 14-day Relative Strength Index (RSI) indicates a sideways movement, oscillating between 40.00 and 60.00.
For the downside, the low from August 1st at 1.3140 will be a key area of support. Conversely, the psychological threshold of 1.3500 acts as a significant resistance point.
Economic indicators
ILO unemployment rate (3 million)
The ILO unemployment rate, published by the UK Secretariat national statistics, represents the proportion of unemployed individuals within the total civilian labor force. This figure is a leading indicator for the UK economy. A rise in interest rates could signify stagnation in the labor market. Generally, a reduction in this rate is considered bullish for the British Pound (GBP), while an increase tends to be bearish.
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