01.08.2025 17:30

The British Pound surged past the 1.3200 mark against the US Dollar on Friday, fueled by unexpectedly weak US employment data. A disappointing July Nonfarm Payroll (NFP) report revealed significantly fewer jobs added than anticipated, triggering a sharp decline in the US Dollar.

This underwhelming jobs report, showing only 73,000 jobs added compared to the projected 110,000, sent the Greenback tumbling to its daily low. The US unemployment rate also inched upward to 4.2% from 4.1%, further contributing to the negative sentiment surrounding the US economy. This unexpected weakness prompted a wave of dollar selling, bolstering the Pound's strength.

The GBP/USD exchange rate benefited significantly from this shift, rebounding from recent four-month lows around 1.3140. Investors reacted swiftly, adjusting their expectations for potential future Federal Reserve interest rate cuts, possibly as early as the September meeting. The pair's recovery reflects this revised outlook.

Should the downward trend continue, the GBP/USD pair might revisit the July low of 1.3141 before potentially reaching the May low at 1.3139. A more significant decline could even test the crucial 1.3000 level. Conversely, upward momentum faces resistance at key short-term moving averages—the 100-day and 55-day SMAs at 1.3337 and 1.3505 respectively—before encountering the July high of 1.3588.

The NFP data, a key component of the US Bureau of Labor Statistics' monthly jobs report, measures the change in US employment excluding the agricultural sector. This crucial economic indicator heavily influences Federal Reserve monetary policy decisions, providing valuable insights into the health of the US labor market and informing interest rate adjustments.