GBP/USD steadies near 1.3165 as markets brace for key US jobs data
The Pound Sterling (GBP) remains firm during the North American session on Monday as traders prepare for the first Nonfarm Payrolls report from the US following the government reopening, which will be released on Thursday, a day that usually features Initial Jobless Claims. At the time of writing, GBP/USD trades at 1.3166, virtually unchanged.
Sterling holds firm while hawkish Fed commentary lifts the Dollar and BoE expectations hinge on upcoming UK inflation.
The Greenback is recovering some ground after last week, as most of the Federal Reserve (Fed) officials struck hawkish commentary, triggering a re-pricing of a rate cut by the central bank at the December meeting. Data from the CME FedWatch Tool shows odds of 43% for a 25-basis-point cut.
Consequently, the US Dollar Index (DXY), which tracks the performance of the buck against a basket of six currencies, is up 0.25% at 99.52. In addition to a hawkish Fed, market players' fears of a possible AI bubble triggered a sell-off in US equity markets.
US Treasury yields are slightly down, with the 10-year note yielding 4.137% down one and a half basis points.
In the UK, investors are relieved by reports that Chancellor Rachel Reeves has no plans to hike income tax rates in the Autumn budget, contrary to what investors had been anticipating due to the fiscal hole.
The UK’s economy has begun to show signs of weakness following last week’s GDP figures. Now is the time for the release of the Consumer Price Index (CPI), which is expected to open the door for the Bank of England (BoE) to cut rates at the December meeting.
Source: Fxstreet
