British Pound breaks 1.3400 as Fed rate-hike bets return after bumper US NFP

Below 1.3400, GBP/USD slides nearly 0.60% to trade at 1.3371.
A 165K rise in US payrolls beats the 65K forecast as unemployment drops to 4.1%.
Sterling finds no support from BoE tightening, even with further rate increases in prospect.

Selling pressure pushes the Pound Sterling nearly 0.60% lower against the US Dollar, with GBP/USD trading at 1.3371 after reaching a peak near 1.3463. Behind the decline is a robust US Nonfarm Payrolls report, which points to a resilient labour market and leaves room for further tightening by the Federal Reserve (Fed).

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Can GBP/USD find support as strong NFP bolsters Fed tightening expectations?

A broad-based increase in hiring lifted US Nonfarm Payrolls by 165K in October, well above the 65K estimate, while the Unemployment Rate fell to 4.1%. September's payroll gain was also revised higher, from 29K to 60K.

The University of Michigan's latest survey put Consumer Sentiment at 51 in November, surpassing both forecasts and the previous month's reading of 48. Respondents also anticipated easing inflation: one-year expectations slipped to 4.3% from 4.7%, while five-year expectations declined to 3.4% from 3.5%.

Following the releases, investors priced in a nearly 77% probability of a December Fed rate hike, up from 67% a day earlier, according to the CME FedWatch Tool.

On the geopolitical front, Al-Arabiya cited an Iranian source as saying that Tehran was responding positively to the latest proposal put forward by mediators. Tensions nevertheless remained elevated. According to Tasnim, unconfirmed reports suggested that a US aircraft had issued an emergency notice near Oman's coast.

Inflation expectations remain anchored, according to St. Louis Federal Reserve (Fed) President Alberto Musalem, who attributed the current excess inflation to energy shocks and the AI buildout. He also said that “people remain concerned about inflation at the current level,”

Although the Bank of England (BoE) rate increase initially supported GBP/USD, the pair could not secure a decisive break above 1.3500. That failure deepened Sterling's slide below 1.3400 during Friday's session.

Risks remain for Cable sellers, however, after the BoE signalled that another rate increase was possible, despite seeing no clear evidence of second-round inflation effects. The BoE also said a potential US-Iran peace deal would benefit the economy, while cautioning that it might not be enough to lower inflation.

Speeches from BoE officials and UK GDP data could generate volatility next week. Across the Atlantic, CPI data, jobless claims and remarks from Fed officials could shape GBP/USD's direction.

GBP/USD Price Forecast: Can Technical Support Hold?

Chart Analysis GBP/USD — Daily price chart for GBP/USD

A neutral near-term bias prevails on the daily GBP/USD chart, where the pair trades at 1.3368, barely above immediate support from the 50/100/200-day simple moving average (SMA) cluster around 1.3362. Trading remains slightly below the descending resistance trend line break at 1.3381, with the pair moving around its key averages. At 50.77, the Relative Strength Index (14) also points to consolidation rather than a directional move.

Any advance would first encounter resistance at 1.3381, the break level of the downward-sloping trend line. Beyond that, the former rising support trend lines present further hurdles at their break levels of 1.3684 and 1.3855. On a decline, the three-SMA cluster near 1.3362 offers the first support, followed by a more distant structural base around 1.3235 at the previous resistance trend line break. Buyers would be expected to return at that level if the pullback extends.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

How Is Pound Sterling Performing Today?

The British Pound recorded its strongest performance against the New Zealand Dollar. Today's percentage movements in the British Pound (GBP) against the major currencies listed are set out in the table below.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.62%	0.64%	0.30%	0.69%	0.83%	0.93%	0.41%
EUR	-0.62%		0.02%	-0.32%	0.10%	0.19%	0.29%	-0.21%
GBP	-0.64%	-0.02%		-0.32%	0.06%	0.18%	0.25%	-0.23%
JPY	-0.30%	0.32%	0.32%		0.39%	0.52%	0.61%	0.10%
CAD	-0.69%	-0.10%	-0.06%	-0.39%		0.13%	0.22%	-0.29%
AUD	-0.83%	-0.19%	-0.18%	-0.52%	-0.13%		0.10%	-0.41%
NZD	-0.93%	-0.29%	-0.25%	-0.61%	-0.22%	-0.10%		-0.50%
CHF	-0.41%	0.21%	0.23%	-0.10%	0.29%	0.41%	0.50%

Percentage movements between major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. Choosing the British Pound on the left and following its row across to the US Dollar, for instance, gives the percentage change for GBP (base)/USD (quote) in the intersecting cell.