Pound sterling price hits six-month high above $1.32 amid soft U.S. dollar and upbeat UK jobs data
GBP/USD spikes to six-month peak as UK jobs data offsets soft wage growth
The British pound surged to a six-month high on Tuesday, climbing past the $1.32 mark against the U.S. dollar as investors cheered upbeat UK employment data and reassessed their outlook for Bank of England policy amid shifting global trade risks. The GBP/USD pair extended its winning streak to a sixth consecutive day, touching 1.325 in North American trading hours.
The Office for National Statistics reported that the UK labor market added 206,000 jobs in the three months ending February, well above January's revised figure of 144,000. While wage growth eased slightly to 5.9%, the overall report reinforced confidence in the underlying resilience of the UK labor market. The unemployment rate remained steady at 4.4%, in line with expectations.
This data comes as the BoE faces mounting pressure to lower interest rates in May, with money markets now nearly fully pricing in a 25bps cut. The expected increase in National Insurance contributions from 13.8% to 15% starting April is seen as a drag on business sentiment and job creation moving forward. However, the near-term inflationary picture remains mixed, with energy and regulated price spikes looming despite cooling wage pressures and softening global demand.
GBP/USD price dynamics (March 2025 - April 2025) Source: TradingView.
U.S. dollar pressured by tariff policy uncertainty
On the other side of the Atlantic, the U.S. dollar index hovered near a three-year low at 99.00 as uncertainty around President Trump’s trade strategy eroded its safe-haven appeal. Markets reacted to his proposal for a temporary suspension of additional automobile tariffs, helping lift risk sentiment globally. Trump’s wavering stance on China and mixed signals on other reciprocal tariffs further contributed to USD weakness.
Fed Governor Christopher Waller added to the dovish tone, stating that recession risks now outweigh inflation concerns, and monetary easing should be considered if tariff-induced pressures mount. This has fueled expectations of rate cuts by the Federal Reserve in the second half of 2025.
Technical outlook and what’s next
Technically, GBP/USD shows strong bullish momentum. All major EMAs are trending higher, while RSI has bounced to 65, confirming strength. The next upside barrier lies at the three-year high of 1.343, while key support rests near the 61.8% Fibonacci level at 1.2927. Wednesday’s release of UK CPI data will be closely watched for further clarity on the BoE’s rate path.
As highlighted in our earlier analysis, the pound remains structurally bullish as long as price holds above the 1.2920 region. Further gains are likely if upcoming CPI data supports rate cut expectations.
