Why is the British Pound surging to 1.3400 as UK jobs beat expectations and hopes of an Iran deal rise?

Can GBP/USD reach 1.3400 after a 0.70% surge as Dollar selling gathers pace?
UK job growth far exceeds the 5.1K forecast, with 102K jobs added.
Sentiment improves on a reported US-Iran agreement, while odds of a November BoE hike climb to 93%.

Pound Sterling has gained about 0.70%, supported by firm UK labour market figures and an apparent agreement between the US and Iran reported by Israel’s Channel 12 News. Having rebounded from the day's low of 1.3300, GBP/USD is trading close to 1.3400.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Can Sterling extend its rally as strong UK jobs data and US-Iran diplomatic reports weigh on the Dollar?

A proposal put to senior Iranian officials by the Pakistani army chief has already secured US approval and preliminary agreement from Tehran, Israel’s Channel 12 News reported.

Under the arrangement described by Israel’s Channel 12 News, Qatar would release frozen funds totalling $6 billion US Dollars and transfer them to Iran. Tehran would agree to a secret visit to its nuclear facilities by the International Atomic Energy Agency, with no public announcement of the visit.

Following the report, the US Dollar Index (DXY) slipped 0.32% to 101.66. The index measures the Greenback's performance against six currencies.

Separately, September's US Pending Home Sales sank 7.3% to a record low, undershooting the -0.5% forecast. Commenting on the figures, Lawrence Yun, the NAR's chief economist, said, “Market conditions weakened in September due to fast-rising mortgage rates.”

September's UK employment increase of 102K was well above the 5.1K forecast and August's addition of 67K jobs. The Unemployment Rate consequently declined, while Average Earnings Including Bonus eased in the three months to August.

According to Prime Terminal, money markets had factored in a 93% probability of a Bank of England rate increase at the November meeting.

September inflation and Retail Sales figures are next on the UK's economic calendar. The US calendar has no releases scheduled for 21 October, but activity would pick up on the 22, when Initial Jobless Claims figures for the week ending 17 October are due.

GBP/USD Price Forecast: Can the recovery clear technical resistance?

Chart Analysis GBP/USD — GBP/USD on the daily chart

A modest bearish bias persists on the daily chart, with GBP/USD at 1.3375 and still below both the 50-, 100- and 200-day simple moving average (SMA) cluster around 1.3411 and falling trend-line resistance near 1.3407. Momentum shows signs of improvement as the Relative Strength Index (14), at 56.3, has moved into positive territory. However, while those overhead barriers continue to limit prices, the rebound looks corrective within a broader pattern of consolidation with a downside bias.

The first upside hurdle is the falling trend line around 1.3407, just ahead of the three-SMA resistance zone near 1.3411. A decisive daily close above that zone would create scope for a move towards 1.3616 and 1.3801, where former rising support lines now act as resistance. Meanwhile, the previous downtrend breakout level near 1.3273 offers immediate support. Slipping below this pivot would leave the recent advance vulnerable to a deeper retracement and renew bearish pressure on GBP/USD.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

How Is Pound Sterling Performing Today?

British Pound recorded its strongest performance against the US Dollar today. The table below sets out its percentage changes against the major currencies listed.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.23%	-0.53%	-0.27%	-0.42%	-0.33%	-0.39%	-0.18%
EUR	0.23%		-0.33%	-0.02%	-0.19%	-0.08%	-0.16%	0.05%
GBP	0.53%	0.33%		0.32%	0.14%	0.27%	0.16%	0.39%
JPY	0.27%	0.02%	-0.32%		-0.19%	-0.07%	-0.16%	0.05%
CAD	0.42%	0.19%	-0.14%	0.19%		0.11%	0.04%	0.24%
AUD	0.33%	0.08%	-0.27%	0.07%	-0.11%		-0.08%	0.15%
NZD	0.39%	0.16%	-0.16%	0.16%	-0.04%	0.08%		0.22%
CHF	0.18%	-0.05%	-0.39%	-0.05%	-0.24%	-0.15%	-0.22%

To read the heat map of percentage movements between major currencies, select the base currency in the left-hand column and the quote currency in the top row. For instance, choosing British Pound on the left and following its row across to US Dollar gives the percentage change for GBP (base)/USD (quote) in the corresponding cell.