GBP Falls Against USD Amid Weaker Jobs Data and Rising Oil Prices

The British pound (GBP) has fallen against the US dollar (USD), retreating from the 1.3550 resistance level, as a stronger USD and weaker UK jobs data weighed on the currency pair.

According to the Office for National Statistics, unemployment remained at 4.9% in June, while vacancies fell by 6,000 to 707,000, their lowest level since 2021. Average earnings rose 3.5%, but regular wage growth in the private sector slowed to a six-year low of 2.8%.

The jobs market is showing few signs of generating wage or demand pressures that would force the Bank of England to raise rates, and it's not weakening quickly enough for aggressive rate cuts. Attention will now turn to UK inflation data tomorrow, expected to show CPI rising to 2.9% year-on-year from 2.6% in June.

The US dollar is pushing higher on safe-haven demand as oil prices rise and Treasury yields extend their gains. The renewed geopolitical uncertainty is supporting the dollar but also raises the risk that the Federal Reserve could keep rates higher for longer if oil prices remain elevated and inflation expectations rise.