GBP\/USD fell 0.71%, or nearly 100 pips, to about 1.3529 during Tuesday\u2019s North American session after the US Presidents\u2019 Day holiday. The move followed a weaker UK jobs report.<\/p>\n
ONS data showed the ILO unemployment rate rose to 5.2% in the three months to December, up from 5.1% in November and forecasts, and the highest in a decade excluding the pandemic. Average earnings excluding bonuses eased to 4.2% from 4.4% over the same period.<\/p>\n
Prime Market Terminal put the odds of a 25 bps Bank of England cut at 71% for the 19 March meeting. For the full year, money markets priced 49 bps of easing.<\/p>\n
UK CPI data is due on Wednesday, with January inflation expected to slow to 3% from 3.4%. In the US, the New York Empire State Manufacturing Index rose to 7.1 in January versus 7.0 expected, and 7.7 in December.<\/p>\n
The ADP Employment Change four-week average increased to 10.3K from 7.8K. GBP\/USD was also quoted near 1.3502, with a nearby level at 1.3522 and support around 1.3511, while a trend line stems from 1.3035.<\/p>\n
We remember that around this time in 2025, a weak UK jobs report sent the pound tumbling. The unemployment rate had just hit a decade-high of 5.2%, excluding the pandemic period. This immediately led markets to bet heavily on a Bank of England rate cut for March of that year.<\/p>\n
Today, the situation is different, as the UK unemployment rate has improved to 4.5% for the three months ending December 2025. More importantly, UK inflation is proving stubborn, with the latest January 2026 CPI figure holding at 2.9%, well above the central bank’s target. Consequently, the odds of a rate cut anytime soon have plummeted, with markets now seeing only a small chance of a move before summer.<\/p>\n
On the other side of the Atlantic, the US Federal Reserve remains just as cautious as it was back in 2025. Recent comments from officials continue to emphasize a data-dependent approach, especially with core inflation still running above 3%. This “higher for longer” stance in the US creates a stark contrast to the pressures facing the UK economy.<\/p>\n
This environment suggests a different approach than the straightforward short we saw in 2025. Given the persistent interest rate advantage for the US dollar, traders might consider strategies that benefit from range-bound trading or limited upside in GBP\/USD. Options structures like selling call spreads could be effective, capitalizing on the view that any significant pound strength will likely be capped.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" GBP\/USD drops nearly 100 pips after weak UK jobs data, boosting BoE cut odds ahead of CPI.<\/p>\n","protected":false},"author":62,"featured_media":17032,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42112","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\/42112","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=42112"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42112\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17032"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=42112"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=42112"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=42112"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}