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Pound holds near 1.3550 as dollar-driven pricing stays in focus
Sterling slipped after a UK labor report, where regular pay growth rose to 3.5% but employment growth nearly halved to 83K, leaving the GBP move largely tied to US rate expectations.
The British pound was trading just below 1.3550 versus the US dollar on Tuesday, holding within Monday’s range after earlier strength pushed it to about 1.3600, its highest level since early May, FXStreet said. FXStreet noted the advance has put the pound back above its major moving averages and changed the market structure, but the move has not come from a meaningful shift in Britain’s rate outlook. The outlet pointed out that Tuesday’s UK labor market release was only the first “red-band” domestic event in three weeks and produced a narrow response, with the currency moving in a 35-pip range and ending slightly lower. In the report highlighted by FXStreet, regular pay growth accelerated to 3.5% in the three months to June from 3.4%, while total pay including bonuses eased to 4.1% from 4.4%. On the jobs side, employment growth nearly halved to 83K from 147K, the unemployment rate held at 4.9% against a 4.8% expected decline, and vacancies slipped to 707K, the weakest reading outside the pandemic since late 2014. FXStreet also said the pound’s broader dynamics remain dollar-led, not UK-driven, because swap pricing and futures are still focused on US policy. The outlet cited futures pricing that puts a September Federal Reserve increase near 31%, down from above 82% after three prior US data releases, including payrolls contracting 23K, July CPI at 3.4% year over year, and retail sales falling 0.6%.
type note: no em dash anywhere.