**GBP/USD Extends Gains** On Monday, GBP/USD continued to rise for a second day, helped by a weaker US Dollar. The pair moved back to the 1.3400 level, as traders awaited the UK’s GDP data, which is expected to meet forecasts unless something unexpected happens. The Pound is seeing gains due to speculation about Federal Reserve rate cuts, as the US Dollar weakens amid fears of potential government shutdowns. The Bank of England is likely to keep its rates steady, while the Fed may consider nearly two rate cuts. This material contains forward-looking statements that involve risks and uncertainties. All financial decisions should be based on thorough research, acknowledging the inherent risks such as the total loss of principal. The information is for informational purposes only and not intended as investment advice. **UK Q2 GDP Data Confirmed** With GBP/USD steady around 1.3440, attention now shifts to the confirmed UK Q2 GDP data. The numbers came in slightly better than expected at 0.4% quarter-over-quarter, suggesting the UK economy is stronger than predicted. This surprises traders, likely encouraging them to safeguard against further gains in the Pound. Meanwhile, the risk of a US government shutdown is rising as the funding deadline approaches and no solution is in sight. We’ve seen significant dollar volatility during previous shutdowns, like in 2018-2019. This uncertainty makes it wise to buy options to protect against sudden price shifts in the coming days. A key factor remains the differences between central banks, with growing expectations for Federal Reserve rate cuts. Recent US inflation data from August 2025 showed a decrease to 2.5%, while the UK’s CPI is still high at 2.9%. This reinforces the belief that the Bank of England will keep rates unchanged. This context supports strategies such as buying GBP/USD call options to take advantage of potential gains in the next few weeks. **Focus on US Jobs Report** All eyes will now be on the upcoming US Nonfarm Payrolls report for September. The last report for August showed job growth slowed to just 150,000. Another weak report would strengthen expectations for a Fed rate cut. Traders should be cautious, as a surprisingly strong jobs number could quickly reverse the dollar’s recent weakness. Create your live VT Markets account and start trading now.

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