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British pound rises as UK inflation keeps BoE hike bets intact

GBP/USD jumped to its highest level since February, helped by softer July Nonfarm Payrolls and improved US jobless-claims data.

Reported · Written up by our desk · Major Pairs

The British pound strengthened in the North American session, gaining 0.25% as markets weighed a firmer UK inflation backdrop that keeps Bank of England rate-hike expectations alive. GBP/USD traded around 1.3639 after topping 1.3659, its highest level since February.

FXStreet linked the move to mixed signals from the United States. US data showed July Nonfarm Payrolls were weaker, but the labor market looked supported overall, while initial jobless claims for the week ending August 15 fell to 206K from 212K, below the 210K forecast, though the 4-week average edged up to 204K.

The dollar’s recovery also provided a tailwind for the pair. The US Treasury announced a bond buyback program aimed at improving liquidity along the long end, but markets interpreted it as a form of yield curve control, with the US Dollar Index steady around 98.79 after touching two-and-a-half-month lows.

Attention remains on upcoming UK and US releases, as traders look for signals on consumer demand and broader activity. In the UK, retail sales for July are expected to show consumer spending decelerated, while traders will also watch S&P Global flash PMIs in the US, amid a lighter data week.

Latest closeGBP/USD 1.354 ▲0.3%|Dollar index 99.64 ▼0.3%

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