British Pound moves away from multi-week top as Hormuz risks support USD

The British Pound (GBP) saw a decline at the start of a new week, moving further away from a multi-week high near the 1.3500 mark. The US Dollar (USD) is gaining momentum as it recovers from the post-NFP swing low, with uncertainties surrounding the Middle East crisis and attempts to reopen the Strait of Hormuz acting as a headwind for the GBP/USD pair.

The US economy lost 23,000 jobs in July, with the previous month's reading revised lower to 20,000 from 57,000, indicating a cooling labor market. Traders now believe there is less than a 45% chance of a US Federal Reserve rate hike in September, down from 67% a week ago. However, there is still a possibility of at least one 25-basis-point (bps) rate increase before the end of the year due to concerns that higher oil prices may reignite inflation.

The upcoming release of the UK Q2 GDP report on Thursday and the US monthly jobs data will be crucial in guiding the GBP/USD pair. The Pound Sterling, the oldest currency in the world, is issued by the Bank of England, which focuses on price stability with a target inflation rate of around 2%. The central bank uses interest rates as its primary tool to achieve this goal. Economic indicators, such as GDP, PMIs, and employment data, can influence the value of the GBP.