GBP/USD exchange rate muted ahead of high impact US data
The pound US dollar (GBP/USD) exchange rate is trading in a narrow range this morning as markets await the publication of the latest US non-farm payrolls data and unemployment rate.
At the time of writing the GBP/USD exchange rate is trading at around $1.3166, virtually unchanged from this morning’s opening rate.
US dollar (USD) to sink following jobs data?
The US dollar (USD) is treading water against the majority of its peers this morning as investors likely hold off from placing any aggressive bets ahead of the latest US labour data, scheduled for released this afternoon.
Following yesterday’s worse-than-expected ADP employment data, today’s jobs reports could see USD exchange rates remain on the back foot.
Speaking earlier in the week, Federal Reserve Chair Jerome Powell commented on the latest set of employment data, and said:
‘It seems unlikely that the labour market will be a source of elevated inflationary pressures anytime soon. We do not seek or welcome further cooling in labour market conditions.’
The latest US non-farm payrolls report is forecast to show another round of weak figures this afternoon, with the index forecast to rise, however, expected to remain near multi-month lows.
Similarly, America’s latest unemployment rate is forecast to marginally dip, however, is also expected to remain near three-year highs.
Should the data print as expected and continue to highlight a weakening US labour market, this could ramp up bets over a 50 basis-point Federal Reserve interest rate cut this month, and in turn see USD plummet.
Pound (GBP) quiet amid lack of market moving data?
The pound (GBP) is struggling to garner investor attention this morning, hobbled by a continued absence of UK economic data releases.
This has seen the pound trade without a clear trajectory, further undermined by this morning’s cautious market mood.
As investors opt for safer assets this morning, the increasingly risk-sensitive pound remains trading without a clear direction.
However, GBP exchange rates could be buoyed this afternoon following the US’s upcoming labour data.
Should the release spark a risk-on mood, Sterling sentiment could firm towards the end of the day. However, should markets remain downbeat, the pound could remain on the back foot.
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