Pound Sterling Strengthens Against US Dollar Ahead of US Nonfarm Payrolls Data
The British pound (GBP) strengthened near 1.3470 against the US dollar (USD) during the European trading session on Friday. The GBP/USD pair strengthened as the US dollar weakened ahead of the US Nonfarm Payrolls (NFP) data for August, which will be released at 12:30 GMT. At the time of writing, the US Dollar Index (DXY), which tracks the greenback against six major currencies, was trading 0.25% lower at around 98.00. Economists estimate that US companies hired 75,000 new workers, nearly in line with July's figure of 73,000. The unemployment rate is expected to rise to 4.3% from the previous release of 4.2%. Meanwhile, Average Hourly Earnings, a key measure of wage growth, is expected to grow moderately at 3.7%, compared to 3.9% in July, with the monthly figure rising steadily by 0.3%.
The official employment report is expected to have a significant impact on the Federal Reserve's (Fed) monetary policy outlook. Traders raised dovish expectations for the Fed's September policy meeting in early August after the July Nonfarm Payrolls report showed significant downward revisions to May and June payroll figures.
Furthermore, Federal Open Market Committee (FOMC) members have also warned of growing downside risks to the labor market following the tariffs announced by US President Donald Trump.
According to the CME FedWatch tool, the Fed is certain to cut interest rates at its September policy meeting.
Meanwhile, the ADP Employment Change report for August, released on Thursday, also showed a slowdown in private sector labor demand. Furthermore, the ISM Services PMI rose to 52.0, surpassing expectations of 51.0 and the previous reading of 50.1. (ayu)
Source: Newsmaker.id
