British Pound: Recovery Tests Key Resistance Against USD – Scotiabank
According to Scotiabank analysts Sean Osborne and Eric Theoret, there’s been a positive shift in sentiment after Prime Minister Starmer announced his resignation, leading to a slight uptick in the British pound sterling (GBP) against the US dollar (USD). They believe that the updated interest rate outlook from the Bank of England (BoE), spurred by the recent rise in oil prices, may provide some backing, and they further explain that the GBP/USD recovery will gain strength as it aims to surpass the 1.3400 mark while operating within the 1.3350-1.3450 range.
“The pound has seen gradual gains versus the US dollar, marking a moderate performance among G10 currencies as we approach Thursday’s NA session. Broad developments continue to hold attention, especially in the absence of major domestic news.”
British Pound Gains Despite Strong US Insistence
On Thursday, the GBP/USD rose to about 1.3400 as the US dollar (USD) struggled to gain traction, despite stronger-than-anticipated unemployment claims and hawkish signals found in the recent Federal Open Market Committee (FOMC) minutes.
The number of new unemployment insurance claims in the US came in at 215,000, falling short of the expected 218,000 and the previously adjusted figure of 217,000. The four-week average also dipped from 222,500 to 218,750. However, continuing claims edged slightly up from 1.806 million to 1.814 million, hinting that while layoffs are limited, workers seem to be taking longer to secure new positions.
As the US Dollar Weakened, the British Pound Hit a New Three-Week High Above 1.3400
On Thursday, the British pound (GBP) gained for the second consecutive day against the US dollar (USD), reaching a new three-week high, crossing above 1.3400. The dollar’s decline followed the release of minutes from the US Federal Reserve and news about potential US-Iran negotiations, which has contributed to the rise in the dollar exchange rate.
Despite the US and Iran exchanging attacks for the second day in a row on Thursday, overall risk aversion seems low, and there remains hope in the markets for ongoing negotiations. US President Donald Trump indicated on Thursday that the Iranian government “strongly wants a deal,” suggesting that peace talks might resume soon.
