The UK is set to release its labour market report, with the Claimant Count Change for October predicted to rise by 20.3K. Previously, it had increased by 25.8 in September. Additionally, the Claimant Count Rate was recorded at 4.4% last month. The report is due at 07:00 GMT.
In the currency market, the GBP/USD pair is under pressure as the USD strengthens. This occurs amidst anticipation of a potential resolution to the US government shutdown. The US Senate has passed a funding bill with a 60-40 vote, requiring further approval from the House.
Gbp Usd Recent Performance
Monday saw GBP/USD maintaining its recent gains, marking a four-day winning streak. With US markets slowing for Veterans Day, some analysts believe risk appetite will persist if the US government shutdown concludes. In the UK, wages are forecasted to decrease slightly for the three months ending in September, while the ILO Unemployment Rate may rise to 4.9%.
GBP/USD traded around 1.3150 in the North American session. Speculation is mounting about the end of the US government shutdown, providing a boost to the USD. President Donald Trump has expressed optimism about a resolution.
The GBP/USD pair is trading around 1.3170, and we’re seeing familiar pressures build from a slowing UK economy. The latest data from the ONS confirms that while unemployment has held steady at 4.2%, wage growth has cooled to 5.5%, down from over 6% last quarter. This trend reinforces the view that the Bank of England may have to consider cutting rates in 2026, which would put downward pressure on the pound.
Us Government Funding And Impact
We can look back at past US government shutdowns, like the one in late 2018 and early 2019, where a resolution ultimately provided a tailwind for the US dollar. Now, as US lawmakers face another funding deadline in early December 2025, any signs of a smooth bipartisan agreement would likely strengthen the dollar again. Traders should therefore watch for positive headlines from Washington as a potential catalyst for GBP/USD weakness.
The upcoming UK Claimant Count is expected to show another modest rise, reflecting a softening labor market that we have been tracking for months. For those looking to position for further sterling downside, buying put options on GBP/USD could be a prudent strategy. This allows traders to benefit from a fall in the exchange rate while limiting their maximum risk to the premium paid.
The main theme for the coming weeks is the growing divergence between the UK and US economies. While the Bank of England is grappling with weak growth, recent US inflation data remains sticky at 3.5%, suggesting the Federal Reserve will keep interest rates higher for longer. This fundamental difference in central bank policy should continue to act as a significant headwind for the GBP/USD pair.
