Pound Plunges as Strong US Job Data Bolsters Dollar

The British pound has declined against the US dollar due to stronger-than-expected US jobless claims data, which reinforced the Federal Reserve's hawkish stance and boosted demand for the greenback.

The initial jobless claims in the US came in lower than forecast, signaling a resilient labor market. This gives the Federal Reserve more room to maintain its higher-for-longer interest rate policy, supporting the dollar. The data, released as of the latest weekly report, showed a decline in new applications for unemployment benefits, a sign of sustained employment strength.

The GBP/USD pair has slipped below key support levels, with the immediate support seen around 1.2500 and resistance at 1.2600. The moving averages indicate a bearish trend in the short term, as the pair trades below the 50-day and 200-day moving averages.