The British Pound (GBP) remained range-bound against the US Dollar (USD) at the start of the week, trading at 1.3357 after reaching a daily low of 1.3328, as overall US Dollar strength in FX markets offset softer US jobs data and a repricing of less hawkish Federal Reserve (Fed) expectations [1]. The GBP/USD pair was noted to be steady near 1.3338, outperforming most G10 currencies on the crosses despite weak UK construction PMI data, which printed a deeply contractionary 38.4, only marginally higher than the prior month's multi-year low of 38.2 [2].
Last week's US jobs report missed estimates, with downward revisions for April and May, prompting markets to price in only 22 basis points of Fed tightening for the rest of the year. For the upcoming July Fed meeting, there is a 77% chance rates will remain unchanged and a 23% chance of an increase, according to Prime Terminal [1]. The ISM Services PMI came in at 54.0, matching expectations but easing from 54.5, while the Services Employment Index improved from 47.9 to 51.2, indicating renewed hiring strength [1][4].
In the UK, the economic calendar was light, and Bank of England (BoE) rate expectations have stabilized. Markets are now pricing in 17 basis points of tightening by December, implying a 70% chance of a single rate hike by year-end, down from 44 basis points a month ago [1][2]. There is little expectation of policy changes at the July 30 and September 17 BoE meetings, with 12 basis points of tightening priced for November and 17 by December [2]. Political uncertainty persists regarding the next UK finance minister, with newswires reporting a 55% chance that Ed Miliband could succeed Rachel Reeves as Chancellor, which may contribute to GBP/USD consolidation around the 1.3300–1.3400 range [1].
Technical analysis shows GBP/USD trading at 1.3365, maintaining a mildly bearish bias as it remains below the simple moving average cluster at 1.3406, with resistance near 1.34 and a broader downward trend-line barrier at 1.3513 [1][2]. The 14-day Relative Strength Index is in neutral-to-slightly positive territory, and Scotiabank strategists see the pair as range-bound between 1.3300 and 1.3400 in the near term [2].
Across the broader FX market, the US Dollar Index (DXY) traded around 101.04, rebounding modestly from last week's low, with the USD up 0.09% against GBP on the day [3]. Lower oil prices and softer inflation data in both the US and Eurozone have reduced pressure on central banks to tighten policy aggressively, further supporting the current range-bound environment [3].
CONCLUSION
The British Pound is holding steady against the US Dollar, supported by stabilized BoE rate expectations and offset by ongoing US Dollar strength. With limited UK data and political uncertainty regarding the next finance minister, GBP/USD is expected to consolidate within the 1.3300–1.3400 range in the near term. Market sentiment remains neutral to mildly positive, with no immediate catalysts for a breakout.