GBP/USD Supported by Strong UK Jobs Data; Mideast Tensions Weigh

The British pound found support during the European session after UK employment data surprised to the upside, with the unemployment rate holding steady in May even as payrolls declined again in June. The better-than-expected labor market figures came alongside new PM Burnham's announcement of a VAT cut on energy bills, his first major policy move which already faces scrutiny. On the European front, the German ZEW survey showed an improvement in recovery sentiment for July, while Eurozone banks continued to tighten lending standards amid ongoing geopolitical concerns. Middle East tensions remained a dominant theme, with Iran stating that any decision to reopen the Strait of Hormuz depends on security considerations — a factor keeping oil prices elevated and risk sentiment fragile. FX option expiries at the 10am New York cut also influenced intraday flows. For traders, GBP pairs may benefit from the jobs beat in the near term, but persistent geopolitical risk and questions around UK fiscal policy present headwinds that could cap gains.