The GBP/USD climbs solidly during the North American session, up by 0.37% ahead of the Bank of England's (BoE) meeting and as traders digest the recent Nonfarm Payroll figures, and over the weekend developments, that opened a spot for US President Trump to nominate a Fed Governor.

At the time of writing, the pair trades at 1.3342.
The Bank of England is expected to reduce rates by 25 basis points, to 4%, according to money market futures data. The decision is expected not to be unanimous, with banks like Morgan Stanley expected to hold, Catherine Mann, a 50 basis points cut, Swati Dhingra, and the rest of the Monetary Policy Committee (MPC) voting for a 25 basis points cut.

UK tabloids had focused on the fiscal situation after a report from the NIESR Institute, suggesting that Chancellor Rees-Mogg needs to raise taxes immediately to fill a gap of £50 billion in public finances. The Institute's Deputy Director said that the scale of tax rises required would be a 5% increase to the basic and higher rates of income tax.

Across the pond, a scarce economic docket in the US would leave traders adrift to Fed speeches by Boston Fed Susan Collins, San Francisco's Fed Mary Daly, and Fed Governor Lisa Cook. From the three, Daly recently crossed the wires and leaned dovish, saying that the central bank would not be waiting forever to ease policy.

Her reaction was attributed to last week's Nonfarm Payrolls report, which showed extensive downward revisions to May and June prints. Nevertheless, there has been an uptick in prices as reported by ISM Services PMI. Although the PMI dipped from 50.8 to 50.1 in July, the employment sub-component fell into contraction, while the prices paid hit their highest level since October 2022. Those stagflationary figures spooked US equities on Tuesday.

In the meantime, Minneapolis Fed Neel Kashkari reiterated that he sees two rate cuts this year.

On Thursday, the US economic is expected to unveil the latest Initial Jobless Claims figures for the week ending August 2, alongside Atlanta's Fed Raphael Bostic speech.

Source: Fxstreet