GBP Edges Higher as BoE Hawkishness Reignites Rate Hike Bets

The British Pound (GBP) has gained strength against the US Dollar (USD), rising above 1.3500 ahead of the highly anticipated US jobs report due later on Friday.

This move comes after Bank of England Chief Economist Huw Pill made hawkish remarks, stating that raising interest rates now would help reduce the chance of more aggressive future rate hikes to combat inflation.

Pill emphasized that a prompt rate hike is not necessarily the start of a prolonged and aggressive series of increases. He pointed out that 'fine-tuning' rates amid energy-price uncertainty is problematic, and second-round effects may be stronger than in the past.

The US employment report for August will closely watched, with traders expecting Nonfarm Payrolls (NFP) to increase by 56,000 and the Unemployment Rate remaining at 4.1%.