GBP/USD Struggles Below 1.3200 Ahead of Key US Jobs Data

The British Pound remains under pressure against the US Dollar early Friday, with the GBP/USD pair hovering around 1.3195 in the Asian session. The decline comes as markets turn cautious ahead of the highly anticipated US employment report for July.

BoE Rate Cut Expectations Weigh on Sterling

Rising speculation that the Bank of England (BoE) will reduce interest rates next week is dragging the Pound lower. Analysts widely expect a 25 basis point rate cut, which would lower the BoE’s key rate from 4.25% to 4.00%. This follows a similar move in May and reflects efforts to manage inflationary pressures amid signs of a cooling labor market. According to Reuters, money markets currently price in an 89% chance of a rate cut at the August 7 meeting.

US Tariff Moves Support the Dollar

Meanwhile, fresh trade actions from the United States are lending support to the US Dollar. On Thursday, President Trump announced a new baseline global tariff rate of 10%. The administration also signed an executive order raising tariffs on Canadian imports from 25% to 35%, effective August 1, 2025. Additionally, tariffs on Mexican goods have been extended for another 90 days to allow more time for trade negotiations. These moves have reinforced the Greenback’s appeal amid ongoing geopolitical uncertainty.

Focus Turns to US Nonfarm Payrolls

All eyes are now on the upcoming US jobs data. The July Nonfarm Payrolls report, due later today, is forecast to show a slowdown in employment growth, with just 110,000 new jobs expected. At the same time, the unemployment rate is projected to rise slightly to 4.2%. A weaker-than-expected result could undermine the Dollar and provide some relief for the GBP/USD pair in the short term. However, strong data may further cement the Dollar’s gains and keep pressure on the Pound.

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