GBP/USD hovers below 1.2200 ahead of US employment data – Crypto News – Crypto News
Connect with us
GBP/USD slides to over one-month low, below 1.1800 mark amid sustained USD buying GBP/USD slides to over one-month low, below 1.1800 mark amid sustained USD buying

others

GBP/USD hovers below 1.2200 ahead of US employment data – Crypto News

Published

2 years ago

on

Share:

  • GBP/USD faces downward pressure ahead of US employment data.
  • Improved US Treasury yields hold positions near multi-year highs due to the Fed’s hawkish stance.
  • BoE’s soft tone surrounding policy rates could undermine the Pound Sterling.

GBP/USD looks to retrace recent gains, trading slightly lower around 1.2180 during the Asian session on Friday. However, the pair received upward support, which could be attributed to the correction in the US Dollar (USD) following the decline in US Bond yields.

The US Dollar Index (DXY) attempts to rebound, hovering slightly higher around 106.40 as of now. The Greenback’s correction comes after reaching an 11-month high earlier this week.

US Treasury yields hold steady, maintaining their positions near multi-year highs. Market participants are exercising caution due to the US Federal Reserve’s (Fed) hawkish stance on the trajectory of interest rates. The 10-year US Treasury yield remains above 4.70%, close to its highest level since 2007.

Despite the overall stability, the US Initial Jobless Claims for the week ending September 29 saw an increase to 207K from the previous reading of 205K. Surprisingly, this surpassed the market expectation of 210K.

On a positive note, US Challenger Job Cuts have significantly decreased from 75.151K to 47.457K in September. Traders eagerly anticipate the upcoming release of US Nonfarm Payrolls and Average Hourly Earnings on Friday. These figures will serve as a confirmation of the tight labor market, and upbeat numbers could potentially trigger a rise in the US Dollar and elevate volatility in the bond market.

On the other side, the British Pound (GBP) faces a bout of underperformance, largely influenced by the unexpected move from the Bank of England (BoE) to halt its rate-hiking cycle in September. This shift deviates from the trend observed since December 2021, as the BoE chose not to raise interest rates.

Adding to the challenge, the central bank revised down its growth forecast for the July-September period from 0.4% to a mere 0.1%, providing little indication of any inclination to pursue further rate increases. In conjunction with the robust bullish sentiment surrounding the USD, these factors present hurdles for the Pound Sterling (GBP).

 

Related Topics:
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Trending