The British pound fell against the US dollar on Thursday after US initial jobless claims came in below market expectations, reinforcing the view that the Federal Reserve can keep interest rates higher for longer. The US Department of Labor reported 213,000 new claims for the latest week, compared with a forecast of 220,000 and a revised 215,000 in the prior period.
The resilient labor market data lifted the US dollar index by 0.2% to 104.50, while the GBP/USD pair dropped to 1.2650 from about 1.2700 earlier in the session, leaving the pound near a two-week low. The CME FedWatch tool showed the probability of a September rate cut falling to 70%, down from 75% a week ago, as market participants scaled back aggressive easing expectations.
From a technical standpoint, traders noted that GBP/USD had slipped below key support, with immediate support around 1.2500 and resistance at 1.2600. The pair was trading below its 50-day and 200-day moving averages, signaling a short-term bearish trend. Analysts added that the pound's next moves would depend on upcoming UK GDP and inflation data, as well as the Bank of England's policy signals. A weaker pound could make UK exports more competitive but also raise import costs and feed inflationary pressure. For the crypto market, a stronger dollar and hawkish Fed expectations often reduce appetite for risk assets, creating a more challenging backdrop for digital assets even though no specific cryptocurrency was directly named in the reports.
