British Pound edges higher against US Dollar, UK Chancellor Healey’s speech eyed

• The British Pound (GBP) ticks up to around 1.3525 against the US Dollar as the latter edges lower.
• The US Dollar struggles to capitalize on stronger-than-expected US NFP data.
• Investors await UK Chancellor Healey’s speech, likely to be related to the budget announcement next month.

The British Pound (GBP) is marginally higher at around 1.3525 against the US Dollar (USD) during the European trading session on Monday. The GBP/USD pair ticks up as the US Dollar struggles to attract bids despite the United States (US) Bureau of Labor Statistics (BLS) posting strong Nonfarm Payrolls (NFP) figures for August.

At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades subduedly near 99.10, but remains inside Friday’s trading range.

The data showed on Friday that the economy created 162K fresh jobs, significantly higher than 56K estimates. July’s NFP data was also revised higher to 21K from -23K.

Upbeat US NFP data has also led to a slight increase in the Federal Reserve’s (Fed) interest rate expectations.

Fed hike odds rise on strong US jobs data

Analysts at Commerzbank note that the “main theme last Friday was a stronger-than-expected US employment report, which revived expectations for a September Fed rate hike.” They highlight that “the Fed funds futures increased the probability of a 25bp hike on 16 September to 62% compared with 51% before the employment report

Meanwhile, investors shift their focus to the US Consumer Price Index (CPI) data for August, which will be published on Friday.

Ahead of the US CPI data, Fed board members New York Fed Bank President John Williams and Governor Christopher Waller have signaled that recent data on inflation has been “encouraging” and inflation expectations are contained.

On the British currency front, investors await speech from United Kingdom (UK) Chancellor of the Exchequer John Healey, which will take place during the day, where he is expected to talk about the state of the economy ahead of next month’s Budget, according to BBC News.

The note released by strategists at Brown Brothers Harriman (BBH) indicates that remarks from UK Chancellor Healey are expected to revolve around raising taxes and reducing expenditure, in a way to highlight growing fiscal risks.

UK fiscal buffer drive points to tax rises and spending cuts

BBH said in a note that UK Chancellor John Healey has pledged to build a solid fiscal “buffer against uncertainty” in the October 28 Budget, a commitment they argue will almost inevitably entail a tighter policy mix. BBH highlights that this objective “points to a mix of tax rises and spending cuts” as higher borrowing costs are estimated to have halved the government’s fiscal headroom to around “£12bn,” underscoring the limited room for manoeuvre on the public finances.

GBP/USD Technical Analysis

In the daily chart, GBP/USD trades at 1.3533. The pair is virtually glued to the 20-day Exponential Moving Average (EMA) at 1.3533, leaving the near-term bias neutral as price oscillates around this pivot rather than clearly above or below it. The upward-sloping trend-line, last broken near 1.3435, still frames the broader advance, while the Relative Strength Index (RSI) at about 52 hints at balanced momentum after the recent pullback from overbought territory.

On the downside, initial support is seen at the EMA pivot around 1.3533, with the former trend-line break area near 1.3435 acting as a deeper structural floor if sellers extend control. With no immediate overhead levels defined in the current setup, a sustained move away from the 20-day EMA—either a bounce that keeps the pair supported above 1.3533 or a clean break back toward 1.3435—would be needed to re-establish a clearer directional bias.

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