The GBP/USD pair has extended its decline to around 1.2840 during Tuesday’s early European session, with the US Dollar (USD) maintaining strength amid ongoing Trump-related market rallies. Investors are focusing on the upcoming UK employment report, which could provide important insights into future Bank of England (BoE) policy.
BoE Rate Cut and Upcoming Job Data
The Bank of England (BoE) recently reduced its key interest rate by 25 basis points to 4.75%, with Governor Andrew Bailey stressing the need for a “gradual approach” to policy easing. The UK employment data, due later today, is expected to show a slight increase in the Unemployment Rate to 4.1% in the three months to September, up from 4.0% in the previous quarter. Wage growth is also in focus, with Average Earnings excluding bonuses projected to rise by 4.7%, down from 4.9% previously. A stronger-than-expected jobs report could support the Pound against the Dollar, potentially limiting the downside for GBP/USD.
Trump Policies and US Dollar Strength
On the USD side, expectations of protectionist policies under the Trump administration—such as significant tariffs, tax cuts, and possible interference with Federal Reserve policy—continue to support the Greenback. These policies could drive bond yields higher, further strengthening the USD. Traders are also awaiting key US economic data later this week, including the Consumer Price Index (CPI), Producer Price Index (PPI), and Retail Sales, which will provide more clues on the Fed‘s path and impact the USD’s outlook.
In summary, GBP/USD remains under pressure as the USD strengthens, with market participants eyeing the UK employment report for potential catalysts. Any signs of stronger wage growth or employment data could offer some relief to the Pound, but the broader USD strength is likely to dominate in the short term.
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