GBP/USD strengthens above 1.3550, investors await NFP Benchmark Revision release

• GBP/USD gathers strength to near 1.3560 in Tuesday’s early European session.

• The prospect of a jumbo Fed rate cut exerts some selling pressure on the US Dollar. 

• HSBC and Deutsche Bank analysts pushed back their forecasts for BoE rate cuts. 

The GBP/USD pair gathers strength to around 1.3560, the highest since August 15, during the early European session on Tuesday. The US Dollar (USD) weakens against the Pound Sterling (GBP) as weaker US jobs data shore up the case for deeper Federal Reserve (Fed) interest rate cuts. The US Nonfarm Payrolls Benchmark Revision for jobs data will be released later on Tuesday. 

The US NFP report released on Friday showed a slowdown in hiring in August, while the Unemployment Rate rose to the highest level since 2021, confirming that labor market conditions in the world’s biggest economy are slumping. 

Analysts expected a downward revision of as much as 800,000 jobs in the preliminary benchmark revisions covering the period from April 2024 to March 2025. The report could signal that the US central bank is behind the curve in efforts to achieve maximum employment. Traders are now pricing in nearly an 89.4% chance of a 25 basis point rate (bps) cut at the Fed's September meeting and a 10.6% probability of a jumbo 50 bps rate cut, according to the CMEFedWatch tool.

On the other hand, the expectation that the Bank of England (BoE) could delay the interest rate cuts might cap the upside for the major pair. HSBC expects the BoE to keep interest rates unchanged until April 2026, abandoning its earlier projection of a quarterly rate reduction starting in August 2024, according to Reuters. Meanwhile, Deutsche Bank delayed its forecast for the next rate cut to December from November.