The Pound Sterling (GBP) gained 0.60% against the US Dollar (USD) on Wednesday during the North American session, reaching a price of 1.3396 after hitting a daily low of 1.3309. The rise continued into the European session, with GBP/USD approaching 1.3370 due to comments from US officials about the labor market.

Asian Market Activity

In the Asian market, GBP/USD held its upward progress at around 1.3350, following a decline in the US Dollar as traders anticipated rate cuts from the Federal Reserve in 2025. Data from the CME FedWatch Tool shows a 94% chance of a rate cut in October and a 93% chance in December. Australia’s September employment report, expected to add 17,000 new jobs and show a 4.3% unemployment rate, is likely to be unremarkable due to recent trends. Meanwhile, Lido DAO has regained support above $1.00, and its Lido V3 testnet is now live for protocol upgrades. In forex trading, GBP/USD briefly reached the 200-day Exponential Moving Average at about 1.3290 but then rose above 1.3400. Gold prices stayed strong around $4,200 per troy ounce, driven by geopolitical tensions, US-China trade issues, and worries about a US government shutdown. Given the high chance of the Federal Reserve cutting rates, we can expect ongoing strength in GBP/USD in the upcoming weeks. The pair bouncing back from the 200-day moving average near 1.3290 to nearly 1.3400 is a solid technical indicator. This follows last week’s surprising increase in US jobless claims to 310,000, reinforcing the view that the Fed needs to act to support the weakening labor market.

Market Strategies

The US Dollar is likely to stay on the back foot, making strategies that bet against it appealing. With the CME FedWatch tool showing a 94% likelihood of a rate cut this month, selling USD call options or buying GBP call options can be a way to take advantage of this market expectation. However, caution is needed, as any unexpected hawkish comments from the Fed could cause a sharp reversal. Wider market anxiety is clear, with gold remaining stable at a high $4,200 per ounce. Gold first broke the $2,100 level back in late 2023, and its subsequent doubling reflects ongoing safe-haven buying amid geopolitical tensions and domestic fiscal concerns. Therefore, purchasing call options on gold or gold-related ETFs could be a smart strategy to hedge against ongoing uncertainty. We should also keep an eye on global economic data, such as the upcoming Australian employment report, for signs of broader weakness. Another weak jobs report from Australia, which is expected, might provide a chance to buy put options on the Australian dollar. This approach aligns with the overall theme of a global slowdown that is influencing the Federal Reserve’s decisions. Create your live VT Markets account and start trading now.

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