FX Report: 1st - 4th September 2025
Buy Side Target
1.3730
Sell Side Target
1.3330
Current Price
1.3503
GBPUSD has remained in a consolidation phase from the 24th of August 2025, between 1.3400 and 1.3430 suggesting a revaluation in price between buyers and sellers to find value in the market. Our traders would be paying attention to how we react from these price levels to suggest any shifts in mid-term direction. As of now we will deploy short-term trading strategies to capitalise on the neutral market condition we are currently being faced with.
United Kingdom: Slumping Activity, Job Cuts & Gilt Market Unease
UK Construction Contracts Sharply
The UK construction sector records its eighth consecutive month of contraction, marking the longest downturn since the early COVID-19 era. Concurrently, car sales fall by 2%, while firms warn of squeezed profit margins due to higher employment taxes—nearly half are cutting jobs to cope. This widespread weakness dampens sterling's outlook amid concerns over economic resilience.
Borrowing Costs and Bond Market Volatility
While markets calm somewhat, volatility in UK gilts persists after recent leaps in 30-year yields. Rising borrowing costs—tied to fiscal pressure and inflation concerns—continue to undermine confidence in sterling.
BoE Rate Cut Path Narrowing
Bank of England Governor Andrew Bailey suggests further rate cuts remain likely, but markets see diminishing odds for aggressive policy easing—with November rate cut chances notably declining. Sterling remains capped amid uncertainty.
United States: Labor Market Softens, Fed Cuts Expected
US Jobs Market Weakens
August private payrolls rise by just 54,000, well below expectations. At the same time, jobless claims are climbing, and layoff levels surge—suggesting a slowing U.S. labor market. The dollar loses ground as markets ramp up bets on imminent Fed rate cuts.
Fed Cut Expectations Surge
Data and commentary point to elevated expectations of Federal Reserve easing, with traders pricing in nearly a 97% probability of rate cuts within the month. This increasingly dovish stance dents the dollar’s appeal, while providing support to GBP/USD.
Last FX Report: 25th - 28th August 2025
Buy Side Target
1.3730
Sell Side Target
1.3330
Current Price
1.3497
Market Outcome
Bearish/ Neutral
We experienced a continuation in the mid-term sell trend, shortly followed by a revaluation in price causing us to enter a neutral phase. Our traders capitalised on these opportunitie using their understanding our proprietary tools to risk manage amidst uncertainty.
*Contracts for difference (CFDs) are complicated financial contracts based on leverage, which can possibly result in huge fluctuations in profits or losses. Therefore, it is essential to study and understand CFDs thoroughly before embarking on investment. You should at the same time stay conscious and ready yourself for the potential risk of losing a part or your whole capital. This outlook is non-financial advice, you should consult with your personal financial advisor before making any investment decisions.
How we traded this outlook:
