Pound Sterling Falls for Third Consecutive Day Against US Dollar
The Pound Sterling (GBP) has fallen for the third straight day against the US Dollar (USD), with a decline of 0.10% to 1.3444 at the time of writing. This downturn comes as US jobs data revealed a healthier labor market than expected, which in turn has weighed on expectations of Federal Reserve (Fed) rate cuts later in the year. The pair had reached a daily high of 1.3465 earlier in the day.
Economic data from the US showed that jobless claims for the week ending January 3 were below estimates of 210K, coming in at 208K, slightly above the previous week’s 200K. This solid data could be a precursor to Friday’s Nonfarm Payrolls for December, with analysts projecting that the economy added 60K jobs, below the previous print of 64K. Additionally, the Challenger Job Cuts in December revealed that companies shed 35,553 jobs, nearly half of November’s 71,321, indicating a positive sign after a year of high job cutting plans.
US Labor Market Shows Resilience
Other data revealed that the US trade deficit narrowed from $-48.1 billion to $-29.4 billion in October, exceeding estimates of a widening of $-58.9 billion, due to a sharp pullback in imports, notably pharmaceuticals. This data suggests that the US labor market is healthier than expected, which could impact expectations of Fed rate cuts. Across the pond, some analysts expect that the UK economy will fare better than expected in 2026, with the first signs available next week with the release of Gross Domestic Product (GDP) and employment figures.
Jane Foley, head of forex strategy at Rabobank, noted that the pound’s performance at the start of the year is a response to the fact that ahead of the budget, the market had built up an awful lot of short positions. Ahead this week, the UK economic docket is absent, while in the US, traders will eye December’s jobs report, Consumer Sentiment, housing data, and speeches by Fed officials.
GBP/USD Price Analysis: Technical Outlook
GBP/USD remains neutral-biased, though a daily close below the 20-day SMA at 1.3442 could exacerbate a test of 1.3400. On further weakness, key support levels emerge like the 200-day SMA at 1.3382, followed by the 100-day SMA at 1.3369 and 1.3300. Conversely, if the pair reclaims 1.3450, buyers could be poised to push prices above 1.3500, followed by the January 7 high at 1.3517.
Pound Sterling Price This Month
The table below shows the percentage change of British Pound (GBP) against listed major currencies this month. British Pound was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.81% | 0.33% | 0.28% | 1.20% | -0.27% | 0.72% | 0.89% | |
| EUR | -0.81% | -0.52% | -0.46% | 0.47% | -0.69% | -0.01% | 0.15% | |
| GBP | -0.33% | 0.52% | 0.06% | 1.00% | -0.17% | 0.51% | 0.68% | |
| JPY | -0.28% | 0.46% | -0.06% | 0.82% | -0.45% | -0.04% | 0.71% | |
| CAD | -1.20% | -0.47% | -1.00% | -0.82% | -1.26% | -0.86% | -0.31% | |
| AUD | 0.27% | 0.69% | 0.17% | 0.45% | 1.26% | 0.68% | 0.85% | |
| NZD | -0.72% | 0.01% | -0.51% | 0.04% | 0.86% | -0.68% | 0.17% | |
| CHF | -0.89% | -0.15% | -0.68% | -0.71% | 0.31% | -0.85% | -0.17% |
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).
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Smart Tip for Readers
When analyzing currency fluctuations, consider keeping an eye on key economic indicators such as jobless claims and trade deficits, as these can significantly impact exchange rates and inform your investment decisions.
