British Pound treads water above 1.3450 with markets awaiting US employment figures

The British Pound (GBP) remains slightly on the defensive against the US Dollar (USD) on Thursday, trading at 1.3460, slightly lower than the previous day's peak of 1.3486. The GBP/USD pair is currently fluctuating within a narrow 100-pip range, with bulls limited below 1.3500, while a weaker US Dollar supports downside attempts above the 1.3400 level.

Support for the Pound was provided by an upward revision of July's S&P Global Services PMI figures and a negative US employment reading, which cast doubt on the upcoming Nonfarm Payrolls report and dampened hopes for Federal Reserve rate hikes. Scotiabank strategists describe the GBP's current sentiment as "neutral/bullish," noting a significant increase in Cable last week and a bullish yet still weak trend oscillator.

Potential gains through the low 1.35 zone could enable the Pound to retest the recent peak in the 1.3555/60 range, with 1.3390/00 identified as support. Meanwhile, the US Dollar is on the back foot due to lower US Treasury yields, with macroeconomic releases not providing strong evidence for further tightening. Analysts at MUFG suggest that doubts over Fed independence are adding pressure to the USD, citing a WSJ report on repeated meetings between President Trump and Fed Chair Kevin Warsh.