GBP/USD climbs above 1.34 as Fed cut and soft data weigh on US Dollar

Pound rallies after the Fed delivers a widely expected rate cut, soft US labor data deepens bets on further easing

US Initial Jobless Claims for the week ending December 6 increased by 236K, up from the previous week's upwardly revised figure of 192K, reported the Department of Labor. Continuing Claims for the week ending November 29 dipped from 1.937 million to 1.838 million.

The data highlights the ongoing weakness of the labor market. Now, eyes are set on next week’s Nonfarm Payrolls report. Other data showed an unexpected shrink in the US Goods and Services Trade Balance from $-59.3 billion in August to $-52.8 billion in September.

In the meantime, the Federal Reserve rate cut weakened the US Dollar, which, according to the US Dollar Index, is testing levels last seen in mid-October, down 0.40% at 97.73. This despite the fact that the dot plots showed that the median wanted the Fed funds rate to end 2025 within the 3.75%-4% range.

In the UK, the docket has remained light except for Friday’s release of Gross Domestic Product (GDP) figures, which are expected to show an increase of 0.1% MoM in October, above September’s 0.1% contraction.

GBP/USD traders are eyeing next week’s Bank of England (BoE) monetary policy decision. A Reuters survey revealed that economists expect a rate cut of 25 basis points on December 18, which would leave the Bank Rate at 3.75%.

On Friday, the Fed parade begins, with speeches by Paulson, Hammack and Goolsbee.

GBP/USD Price Forecast: Technical outlook

The GBP/USD trend has shifted from neutral to neutral-upwards, with buyers regaining control, but they must achieve a daily close above 1.3400. This will expose the 1.3450 area, followed by the October 17 peak ahead of 1.3500. On the flip side, the first support is 1.3400, followed by the 100-day SMA at 1.3358.

(This story was corrected on December 11 at 16:31 GMT to say that the US Goods and Services Trade Balance print in August was $-59.3 billion, not $-59.8 billion.)

Pound Sterling Price This week

The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the US Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.85%	-0.67%	-0.08%	-0.46%	-0.44%	-0.83%	-1.14%
EUR	0.85%		0.20%	0.82%	0.43%	0.50%	0.08%	-0.25%
GBP	0.67%	-0.20%		0.62%	0.22%	0.28%	-0.14%	-0.46%
JPY	0.08%	-0.82%	-0.62%		-0.39%	-0.34%	-0.73%	-1.04%
CAD	0.46%	-0.43%	-0.22%	0.39%		0.05%	-0.38%	-0.67%
AUD	0.44%	-0.50%	-0.28%	0.34%	-0.05%		-0.40%	-0.71%
NZD	0.83%	-0.08%	0.14%	0.73%	0.38%	0.40%		-0.31%
CHF	1.14%	0.25%	0.46%	1.04%	0.67%	0.71%	0.31%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).