British Pound eases below 1.3450 as markets brace for the US Nonfarm Payrolls report

• GBP/USD drifts below 1.3450 but remains trapped within the weekly range.
• FX volatility remains low as investors await the US Nonfarm Payrolls report.
• The Dollar drew some support on Thursday from a Financial Times report hinting at Fed rate hikes in September.

The British Pound (GBP) nurses minor gains against the (USD) for the second consecutive day on Friday, with the GBP/USD retreating to levels just below 1.3450 at the time of writing. The pair, however, remains trapped within the 1.3400-1.3500 range that has been limiting price action since the beginning of August. 

The US Dollar ticked up on Thursday, fuelled by a report from Financial Times, citing sources close to the US Federal Reserve (Fed), to affirm that Chairman Kevin Warsh would be open to hiking interest rates in September if upcoming inflation data shows that price pressures remain persistently high.

Investors, however, remain wary of placing larger directional bets on the US Dollar, ahead of the release of July’s Nonfarm Payrolls (NFP) report, which is due later on the day. The market is expecting an increase to 80K new payrolls from June’s 57K, with the Unemployment Rate unchanged at 4.2% and wages growing at a steady pace of 0.3% month-over-month and 3.5% from July 2025.

Strategists at UOB Group note that the recent GBP/USD advance has lost conviction: “While strong momentum suggests further upside, it remains to be seen whether GBP can break and hold above the significant resistance at 1.3555.” In that sense, the bank argues that “from here, a breach of 1.3410 (no change in ‘strong support’ level) would mean that 1.3555 is not coming into view.”