GBP/USD Rate Repricing Sets Stage for Cable's Next Move

The GBP/USD pair surpassed 1.3500 on Friday after a surprise contraction in nonfarm payrolls, but gave back part of the move as the dollar found support in the New York session.

Since late June, cable has traded near 1.32, breaking above 1.34 for the first time in a year only to stall and compress between 1.3400 and 1.3500.

The entire move can be attributed to rate repricing by the Federal Reserve, with every basis point tracing back to the Fed's decision to hold its target range at 3.50%, 3.75% on July 29.

Friday's payrolls contraction took September hike probability down to 44%, and a hot US July CPI on August 12 is expected to drop it further, with cable potentially attacking 1.36 if the data is soft.