The pair climbs toward 1.3350 after strong US jobs data fueled Fed rate hike bets, lifting the USD Index to a two-week high.
The GBP/USD pair recovered from a three-week low near 1.3300, rising in early European trading as the US Dollar paused its rally. The move follows Friday’s stronger-than-expected US Nonfarm Payrolls report, which showed 172K jobs added in May, surpassing the 85K estimate and April’s revised 179K print.
The data reinforced expectations for a hawkish Federal Reserve, with traders now pricing in over a 70% chance of a 25 basis point rate hike in 2026. The USD Index (DXY) hit a two-week high on the release, while steady unemployment at 4.3% and persistent wage growth concerns added to inflationary pressures.
Geopolitical risks and UK political uncertainty may limit further GBP gains, though the pair remains supported by a brief USD pullback.