Important events today:

05.08 12:15 UTC: USD – ADP Employment Change.

05.08 14:00 UTC: USD – ISM Services PMI.

The pound receives local support following the Bank of England decision to hold the rate at 3.75. The vote turned out to be more hawkish than expected, with three committee members voting for a rate hike to 4.00, reflecting concerns over inflation risks. The cautious fiscal stance of the new government has also reduced part of the political risk premium, although weak economic dynamics constrain the potential of the British currency.

For GBP-USD, the overall US dollar momentum is more important, which remains weak at the start of the session. Falling oil prices have eased concerns regarding additional US inflationary pressure, Treasury yields dropped, and the probability of a Fed rate hike in September diminished. Such a repricing temporarily supports the pound even without strong internal economic acceleration.

During the day, attention will shift to UK business activity indices, followed by US ADP and ISM services data. Weak UK metrics could limit pound purchases, whereas strong US statistics could reverse the current momentum. Until these risks materialize, softer Fed expectations and the Bank of England signal maintain the upside scenario for GBP-USD.

Recommendations: BUY 1.3455, SL 1.3420, TP 1.3540.