Pound Holds Firm Near 1.34 Ahead of BoE, US Jobs Data

Key Moments

Spotlight On BoE As GBP/USD Trades Sideways

GBP/USD was little changed near 1.3390 in Asian trading on Monday, with traders reluctant to add large positions ahead of key central bank and labor market updates later in the week. The Bank of England’s interest rate announcement on Thursday is set to dominate attention, followed by U.S. jobs figures for October on Friday.

According to economists surveyed by Reuters, the BoE is expected to raise its Bank Rate to 4.0% from 3.75% at its November meeting. This move would mark the first rate hike since August 2023, when inflation was still running above the BoE’s 2% target. Anticipation of a more hawkish BoE stance has been offering underlying support to the British Pound (GBP) against the U.S. Dollar (USD).

“While we don’t expect a clear steer from the Committee on how many hikes they’re planning, it’s possible that the meeting minutes or Bailey … signal that Bank Rate is unlikely to reach the level that is priced in by financial markets,” said Alexander Harvey, UK economist at consultancy Oxford Economics.

U.S. Elections And Labor Data In Focus For Dollar Traders

Beyond the BoE, the U.S. political and economic calendar is also in focus. The U.S. midterm elections and the latest employment report are being closely monitored by investors this week.

Nonfarm Payrolls (NFP) are forecast to show an increase of 65,000 in September, while the Unemployment Rate is expected to remain at 4.2% over the same period. Any indication of a stronger-than-expected U.S. labor market could bolster the Greenback and weigh on GBP/USD in the near term.

OCBC: Pound Resilience Meets A Higher Hurdle

Strategists at OCBC noted that the Pound has “held up better than expected despite the fiscal strain from higher energy costs,” highlighting the latest UK Budget as an important stabilizing force. They observed that the Budget “avoided adding to those concerns,” as it “stayed within the fiscal rules and preserved GBP15bn of headroom against the stability rule, even after absorbing some of the impact from the Middle East conflict.”

OCBC emphasized that the broader macro backdrop in the UK “remains relatively supportive.” They pointed to economic growth that has “proved resilient,” with the OBR lifting its “2026 growth forecast to 1.2%.” In their assessment, “greater political stability and fiscal discipline should continue to offer GBP some relative support,” and “closer UK-EU economic ties could provide an additional medium-term tailwind.”

At the same time, the bank warned that “the easy gains may be behind us.” OCBC highlighted that markets are “already pricing an aggressive Bank of England tightening cycle, with a November hike heavily discounted and substantially more tightening priced into 2027.” With “plenty of tightening already in the price,” they argued that “the bar for the next leg higher in GBP is getting increasingly high.”

Greene’s Hawkish Tone Limits Rate-Cut Speculation

BoE policymaker Greene’s latest remarks continued to underscore a hawkish stance. Greene scored 7.4/10 on FXS Speechtracker, matching her historical average and indicating a consistently firm tone rather than a shift in either direction.

The speech underlined that wage disinflation has stalled at levels above those consistent with 2% inflation and reiterated a view that policy should act preemptively against second-round inflation effects. This perspective favors keeping UK interest rates elevated for an extended period, providing incremental support to GBP.

Greene’s assessment that the risk of second-round effects is greater than previously perceived, even as forward-looking indicators point to pay growth nearer 3.5% and the economy continues to surprise on the upside, suggests little inclination toward early rate cuts. Her indication that labor market slack may have peaked reflects concern over the potential for renewed wage pressures, aligning the message with a steady-to-hawkish policy bias. This stance moderates expectations for aggressive BoE easing and helps underpin GBP performance relative to other currencies.

Technical Picture: Mildly Positive Bias For GBP/USD

On the daily chart, GBP/USD retains a slightly constructive outlook. The pair is trading above both the 100-day simple moving average (SMA) and the middle SMA of the Bollinger Bands, signaling a modest bullish inclination. The spot rate remains below the upper Bollinger band, indicating scope for additional upside, while the 14-period Relative Strength Index (RSI) around 56 points to positive momentum without yet signaling overbought conditions.

On the upside, resistance is located near the upper Bollinger band around 1.3450, where recent gains may begin to encounter selling interest. On the downside, initial support is aligned with the 100-day SMA at 1.3385, followed by the middle Bollinger band at 1.3310. If selling pressure intensifies, the lower Bollinger band near 1.3175 offers a more substantial support zone.