GBP\/USD rose in the North American session on Wednesday but later gave up part of its move after a stronger-than-expected US jobs report reduced expectations of Federal Reserve rate cuts.<\/p>\n
The pair pulled back from a daily high of 1.3712 and was trading at 1.3655 at the time of writing, up 0.10%.<\/p>\n
We’re seeing a clear shift after the blowout US Non-Farm Payrolls report, which showed a gain of over 350,000 jobs against an expected 180,000. This unexpected strength has significantly altered expectations for a Federal Reserve interest rate cut in March. Consequently, the probability of a cut priced by the markets has plummeted from over 70% to now below 40%.<\/p>\n
This sudden reversal suggests volatility in GBP\/USD is likely to increase in the coming weeks. The high of 1.3712 now forms a strong technical resistance level that will be difficult to breach. We believe selling out-of-the-money call options with strike prices above 1.3725 could be a prudent strategy to collect premium from capped upside potential.<\/p>\n
This dollar strength is contrasted by recent UK inflation data, which last week came in below forecasts at 2.1%. This divergence in economic outlooks strengthens the case for a weaker Pound relative to the Dollar. Therefore, traders might also consider buying put options to directly profit from a potential downturn toward the 1.3500 level.<\/p>\n
We are reminded of a similar dynamic we observed in the third quarter of 2025. Back then, a series of robust US data releases consistently pushed back rate cut expectations and placed a firm ceiling on GBP\/USD rallies. History suggests that this strong US data trend, if it continues, could suppress the pound for an entire quarter.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" GBP\/USD rose then eased as strong US jobs data trimmed Fed rate-cut bets, hovering near 1.3655.<\/p>\n","protected":false},"author":62,"featured_media":17037,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-41623","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41623","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=41623"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41623\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17037"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=41623"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=41623"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=41623"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}