The British Pound strengthened against the US Dollar on Tuesday, with the GBP/USD pair climbing around 0.14% to trade near 1.3451 after recovering from an intraday low of 1.3419. The move higher was driven by weaker-than-expected US economic data, which eased expectations of aggressive Federal Reserve tightening while maintaining confidence in the resilience of the US labor market.
Fresh data from the US Job Openings and Labor Turnover Survey (JOLTS) showed that job openings declined to 7.359 million in June, down from 7.537 million in the previous month and slightly below market expectations of 7.4 million. The decline reflected reduced hiring demand across several industries, including healthcare, wholesale trade, business services, and the leisure and hospitality sectors. Despite the drop in vacancies, layoffs remained largely unchanged, indicating that employers continue to retain workers even as hiring activity slows. With roughly one job opening available for every unemployed individual, the labor market still appears balanced rather than weak.
Meanwhile, the US Commerce Department reported that the country’s trade deficit narrowed to $73.3 billion in June from $77.6 billion previously. Although the figure came in marginally above economists’ forecasts of $73 billion, it highlighted an improvement in the external trade position.
Market sentiment also received a boost from geopolitical developments. Reports suggesting that the United States and Iran could reach an agreement to reopen the Strait of Hormuz improved investor confidence and triggered a sharp decline in crude oil prices. West Texas Intermediate (WTI) fell around 4% to $76.73 per barrel, reducing inflation concerns and weighing on the US Dollar, which has recently shown a positive correlation with oil prices.
As a result, the US Dollar Index (DXY) slipped about 0.04% to 99.94. Investors also reduced expectations for further Federal Reserve policy tightening, pricing in roughly 20 basis points of additional hikes by year-end, compared with around 24 basis points a day earlier. The softer outlook for US interest rates limited demand for the Greenback, allowing the Pound to extend its recovery.
Trade Idea:
Consider buying GBP/USD above 1.3450, targeting 1.3500–1.3530, with a stop-loss below 1.3415, as softer Fed expectations and improved risk sentiment continue to support Sterling.