GBP/USD fell to 1.3430, with UK and US economic data and expectations of a Fed rate cut dominating the market.
2025-09-04 13:57:59
British Chancellor of the Exchequer Rachel Reeves announced on Wednesday that she would announce her annual budget on November 26th, emphasizing that the UK economy is not "broken" and that spending will be strictly controlled to reduce inflation and borrowing costs. However, market concerns about the UK's fiscal sustainability remain, which has suppressed the British pound and put downward pressure on the GBP/USD pair.
U.S. job openings fell to 7.181 million in July, down from a revised 7.357 million in June and below market expectations of 7.40 million. The weak jobs data reinforced market bets that the Federal Reserve will cut interest rates this month.
CME FedWatch data shows that the market's probability of a 25 basis point rate cut this month has risen to 97%, a significant increase from 91% last week. The market also expects a cumulative rate cut of 139 basis points by the end of next year. The employment data supported the short-term weakness of the US dollar, thereby limiting the decline of the GBP/USD pair to some extent.
On the daily chart, GBP/USD remains weak and volatile around 1.3430, with the short-term moving average showing a mild downward trend and the RSI indicator slightly below neutral, indicating a dominant selling pressure. If it falls below the 1.3400 support level, it may further pull back to the 1.3350-1.3320 area.
If the rebound breaks through the resistance of 1.3475-1.3480, it may regain upside space and point to around 1.3520.
Editor's opinion:
The short-term trend of GBP/USD is influenced by the dual fundamentals of the UK and the US: the UK's fiscal risks support selling pressure, while weak US employment strengthens expectations of interest rate cuts and limits the dollar's rebound.
The exchange rate is likely to remain range-bound between 1.3400 and 1.3480 until the UK budget and US employment data provide clear direction. In the medium term, if UK fiscal confidence improves or expectations of a US dollar rate cut continue to rise, the exchange rate may have an opportunity to break out of the range.
U.S. job openings fell to 7.181 million in July, down from a revised 7.357 million in June and below market expectations of 7.40 million. The weak jobs data reinforced market bets that the Federal Reserve will cut interest rates this month.
CME FedWatch data shows that the market's probability of a 25 basis point rate cut this month has risen to 97%, a significant increase from 91% last week. The market also expects a cumulative rate cut of 139 basis points by the end of next year. The employment data supported the short-term weakness of the US dollar, thereby limiting the decline of the GBP/USD pair to some extent.
On the daily chart, GBP/USD remains weak and volatile around 1.3430, with the short-term moving average showing a mild downward trend and the RSI indicator slightly below neutral, indicating a dominant selling pressure. If it falls below the 1.3400 support level, it may further pull back to the 1.3350-1.3320 area.
If the rebound breaks through the resistance of 1.3475-1.3480, it may regain upside space and point to around 1.3520.
Editor's opinion:
The short-term trend of GBP/USD is influenced by the dual fundamentals of the UK and the US: the UK's fiscal risks support selling pressure, while weak US employment strengthens expectations of interest rate cuts and limits the dollar's rebound.
The exchange rate is likely to remain range-bound between 1.3400 and 1.3480 until the UK budget and US employment data provide clear direction. In the medium term, if UK fiscal confidence improves or expectations of a US dollar rate cut continue to rise, the exchange rate may have an opportunity to break out of the range.
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