GBP Faces UK Jobs Test as Rate Hopes Rise

The British Pound has seen its interest rate outlook shift in favor this year. Markets have moved from pricing further Bank of England easing to renewed tightening, with the BoE's cash rate sitting at 3.75%. The 3-month SONIA, which signals little urgency for an immediate rate cut, stands at 3.79%.

This change in expectations has been reflected in GBP/USD and GBP/AUD price action, but both pairs are showing signs of vulnerability ahead of UK employment data. This key economic release could test whether the shift in rate expectations is justified.