The British pound rose on Thursday against a basket of major currencies, extending gains for the third consecutive day against the US dollar and recording its highest level in five weeks, amid weak expectations for the Bank of England to continue easing monetary policy and cutting interest rates.

To reprice those expectations, investors later today await key UK economic data on growth during the second quarter of this year and during June.

Price Overview

•The pound rose against the dollar by 0.1% to $1.3592 — its highest since July 10 — from the opening price of $1.3578, with a low of $1.3570.

•On Wednesday, the pound gained about 0.6% against the dollar, marking a second consecutive daily rise, as the US currency continued to face selling pressure in the forex market.

UK Interest Rates

•Following last week’s hawkish Bank of England meeting, traders reduced bets on further BOE rate cuts, now pricing in an additional 17 basis points of cuts this year.

•The probability of a 25 basis point BOE rate cut in September is currently steady at around 30%.

UK Economic Growth

To reprice the above expectations, investors later today are awaiting crucial UK data on economic growth in the second quarter and monthly growth for June.

Forecasts point to UK GDP growing by 0.1% in Q2, after a 0.7% rise in Q1 — the best pace in a year — with monthly growth of 0.2% in June, compared to a 0.1% contraction in May.

Pound Outlook

At Economies.com, we expect that if UK economic growth data proves stronger than market forecasts, the probability of a BOE rate cut in September will decline, leading to further gains in the pound’s levels.

The Australian dollar rose in the Asian market on Thursday against a basket of major currencies, extending gains for the third consecutive day against its US counterpart, recording its highest level in two weeks, following the release of strong labor market data in Australia for July.

The data showed further resilience in the Australian economy during the third quarter of this year, which led to reduced expectations for the Reserve Bank of Australia to cut interest rates at its September meeting.

Price Overview

•The Australian dollar rose against its US counterpart by about 0.4% to 0.6569 — its highest since July 28 — from today’s opening price of 0.6545, with a low of 0.6542.

•On Wednesday, the Australian dollar rose 0.25% against the US dollar, marking a second consecutive daily gain, amid the continued decline of the US currency against a basket of major peers.

Australian Labor Market

Figures from the Australian Bureau of Statistics released on Thursday showed the unemployment rate falling to 4.2% in July, from 4.3% in June — the highest since November 2021 — in line with market expectations for a reading of 4.2%.

The Australian economy added about 24,500 new jobs in July, slightly below market expectations of around 25,300 jobs, after adding about 1,000 jobs in June, revised down from 2,000.

The acceleration in the labor market is the latest indication of the resilience of the Australian economy during the third quarter of this year, reducing the need for the Reserve Bank of Australia to continue easing monetary policy and cutting interest rates.

Australian Interest Rates

•In line with expectations, the Reserve Bank of Australia cut interest rates this week by 25 basis points to a range of 3.60% — the lowest since April 2023.

•The RBA stated that further monetary easing may be necessary to achieve its inflation and employment objectives, given that the economy has lost some momentum.

•RBA Governor Michele Bullock indicated the possibility of at least another 50 basis points of easing if core inflation continues to slow from its current 2.7% toward the central bank’s target range of 2%–3%.

•Following the labor market data, market pricing for a 25 basis point RBA rate cut in September fell from 75% to 65%.

Soybean prices rose on Wednesday on the Chicago Board of Trade, hitting their highest level in five weeks.

This came after the US Department of Agriculture announced on Tuesday that it had reduced soybean planting acreage in the United States, pushing the agricultural commodity’s price to its highest since July 3.

Following the reduction in soybean planting acreage, total US soybean stocks for the upcoming 2025–2026 season are expected to fall to their lowest level in about three years.

This comes after American farmers had already cut planted acreage due to the US–China trade dispute.

It is worth noting that US President Donald Trump earlier this week called on China to quadruple its purchases of American soybeans from current levels.

Corn

In trading, December corn futures rose 0.6% to $3.97 per bushel by the close of the session.

Soybeans

November soybean futures rose 0.9% to $10.44 per bushel.

Wheat

September wheat futures rose 0.4% to $5.07 per bushel.

Gold prices rose on Wednesday as the US dollar fell against most major currencies and markets digested US inflation data and its implications for the Federal Reserve’s decision.

Government data showed that the annual growth rate of the US Consumer Price Index (CPI) held steady at 2.7% in July, below expectations for an increase to 2.8%.

The core CPI — which excludes volatile food and energy prices — rose to 3.1% in July, above expectations of a 3% increase and compared with 2.9% in June.

According to the FedWatch Tool, investors see a 99% probability of a 25-basis-point rate cut in September, compared with 94% yesterday and 57% a month ago.

Analysts also see a 61% chance of another 25-basis-point cut in October, compared with 34% a month ago, along with a 51% chance of a similar cut in December, compared with 25% a month earlier.

Elsewhere, the US dollar index fell 0.2% to 97.8 as of 20:04 GMT, after reaching a high of 98.1 and a low of 97.6.

In trading, spot gold rose 0.1% to $3,403.4 an ounce at 20:05 GMT.