GBP/USD is pressured by modest USD strength

GBP/USD trades with a mild negative bias, below mid-1.2700 amid reviving USD demand

The GBP/USD pair extends Friday’s late pullback from the 1.2800 neighbourhood and edges lower during the Asian session on Monday, though lacks follow-through selling. Spot prices currently trade around the 1.2735 region, representing the 50-day Simple Moving Average (SMA) and manage to hold comfortably above a five-week low touched last Thursday.

As investors look past Friday’s mixed US monthly employment details, the prospects for further policy tightening by the Federal Reserve (Fed) assist the US Dollar (USD) to attract some buying and act as a headwind for the GBP/USD pair. It is worth recalling that the headline US NFP missed consensus estimates and showed that the economy added 187K jobs in July. Adding to this, the readings for May and June were revised down, suggesting that demand for workers was slowing. That said, solid wage growth and a downtick in the unemployment rate pointed to continued tightness in the labour market. This keeps the door for one more 25 bps rate hike by the Federal Reserve (Fed) in September or November wide open and lends some support to the buck. Read more…

GBP/USD justifies fears about UK employment, growth around 1.2750, focus on UK GDP, US inflation

GBP/USD justifies the market’s fears about UK employment and growth conditions as it retreats to 1.2745 amid Monday’s sluggish Asian session, following a three-week downtrend. In doing so, the Cable pair also justifies hawkish bias about the Federal Reserve (Fed), as well as the Bank of England’s (BoE) failure to please optimists despite fueling interest rates to multi-year highs. Furthermore, a cautious mood ahead of the first readings of the UK’s second quarter Gross Domestic Product (GDP) and the US inflation numbers also keep the Pound Sterling sellers hopeful.

The latest outcome of the UK’s Recruitment and Employment Confederation (REC), funded by the global quant giant KPMG, revealed downbeat employment conditions in Britain due to economic pessimism. “British employers reduced the number of new permanent staff they hired through recruitment agencies by the most since mid-2020 last month due to concerns about the economic outlook,” said the KPMG/REC poll. Read more…