GBP/USD rises to 1.3440 as strong UK data offsets US weakness

• GBP/USD rebounds from 1.3332 lows 1.3442 as US Dollar slips after Tuesday's sharp rally above DXY 98.50.
• US JOLTS report shows July job openings fell sharply, highlighting tariffs' drag on hiring and manufacturing weakness.
• UK Services PMI jumps to 54.2, easing fiscal worries, while BoE officials stress inflation risks and policy caution.

The GBP/USD advances during the North American session up by 0.39% following the release of economic data from the United States (US). Also, fears of the UK's government being unable to meet its fiscal requirements eased on signs that the economy continued to fare well. The pair trades at 1.3442 after bouncing off daily lows of 1.3332.

Sterling gains 0.39% after upbeat UK Services PMI tempers fiscal fears, while weak US jobs data pressures Dollar

The Greenback is weakening on Wednesday following Tuesday's rally, which sent the US Dollar higher, past the 98.50 figure during the session, according to the US Dollar Index (DXY). US data revealed that job openings in July fell to 7.181 million down from 7.437 million in June, revealed the Bureau of Labor Statistics (BLS).

The data revealed that hiring increased by 41K and layoffs increased to 12K. Economists blame the ongoing slowdown in the jobs market on US President Donald Trump's tariffs.

Other data showed that Factory Orders in Jully fell -1.3% MoM better than the expected -1.4% contraction. Today's report, coupled with Tuesday's ISM Manufacturing PMI contracting for the sixth consecutive month, suggests that manufacturing activity continues to deteriorate.

Eyes will be on the release of Nonfarm Payroll figures on Friday. Estimates suggest that the US economy created 75K jobs in August, and an uptick in Unemployment Rate.

Across the pond, strong Services PMI in the UK, tempered fears of the government's ability to show fiscal constraint ahead of the Autumn budget. S&P Global Services PMI rose by 54.2 in August, up from 51.8 in July, its highest level since April 2024.

Some members of the Bank of England (BoE) crossed the wires. BoE's Governor Baily said that he does not think that QT is the cause for the jump in bond yields, adding that inflation expectations are anchored around a level consistent with the inflation goal. He added that the path of rates will continue to the downside and that he is concerned about downside job risks.

BoE Governor Taylor said that she is concerned to get inflation sustainably to 2%, and that maintaining monetary policy restrictiveness as long as necessary but no longer.

GBP/USD Price Forecast: Technical outlook

The GBP/USD bounced off the weekly lows of 1.3332 and reclaimed 1.3400, which opens the door to test the 100-day SMA at 1.3450. If breached, traders could test the 20-day SMA at 1.3483, and the 50-day SMA at 1.3484. On further strength, the 1.35 hanble lies overhead.

Conversely, a daily close below 1.3400 will expose the September 3 low of 1.3332, ahead of the 1.3300 figure.