GBP/USD falters on mixed BoE signals, higher US bond yields

• GBP/USD continues its downward trajectory, losing 0.25% despite conflicting comments from Bank of England's Chief Economist and Governor.
• US jobless claims outperform expectations, hinting at a resilient labor market and adding to the debate among Fed policymakers.
• The British Pound braces for the UK's Q3 GDP report while investors await insights from Fed Chair Powell's IMF panel discussion.

The British Pound (GBP) extended its losses against the US Dollar (USD), and for the fourth straight day, fell 0.25% after the pair hit a daily high of 1.2308. Nevertheless, dovish remarks by the Bank of England’s (BoE) Chief Economist Huw Pill on Tuesday, weakened the Pound due to rate cut speculations. The GBP/USD trades at 1.2249.

GBP/USD dips to 1.2249 amid mixed signals from BoE officials and a robust US job claims report

On Wednesday, BoE Governor Andrew Bailey poured cold water on Pill’s comments, regarding that market pricing a rate cut in August 2024 seemed reasonable, commenting that it’s too early to cut rates. Earlier in the European session, Huw Pill crossed the wires, backpedaling its Monday comments, and stated that monetary policy must stay tight to lower inflation.

Aside from this, unemployment claims in the United States (US) decelerated compared to the previous week’s Initial Jobless Claims report, which showed claims rising 220K, it came at 217K, below estimates of 218K. Even though the data paints a tight labor market, last Friday’s Nonfarm Payrolls report showed the economy added 150K jobs, below forecasts of 180K, while witnessing a jump in the unemployment rate to 3.9%.

Consequently, a division among the Federal Reserve’s policymakers has begun, with most members adopting a more neutral stance. Still, next week’s inflation report could shift current views on the FOMC’s members.

Recently, a US 30-year bond auction hit a yield of 4.769%, sending US Treasury bond yields soaring. Thus, the Greenback is solidly rising, with the US Dollar Index (DXY) gaining 0.19%, at 105.72.

Up next, the UK economic docket would feature the Gross Domestic Product (GDP) for Q3, which is expected to contract by 0.1% QoQ. On the US front, Fed Chair Jerome Powell would cross the wires on an International Monetary Fund (IMF) discussion panel.

GBP/USD Technical Levels