The GBP/USD pair remains strong, hovering near its peak of 1.3616—the highest level since February 2022, observed on June 5. Currently, the pair trades close to 1.3570, as markets await key employment data from the United States.
The US Dollar Index (DXY), a measure of the dollar’s strength against a basket of six major currencies, shows an uptick, currently trading around 98.80. The forthcoming US Nonfarm Payrolls report is anticipated to show a job increase of 130,000 in May, a decrease from April’s 177,000. The Unemployment Rate is projected to remain stable at 4.2%.
Recent data indicates an increase in Weekly Initial Jobless Claims to 247,000, surpassing expectations of 235,000, according to the US Department of Labor. Furthermore, the US ADP private sector employment data for May showed a rise of only 37,000 jobs, significantly below the expected 115,000, suggesting potential sluggishness in the job market.
According to UBS economist Paul Donovan, Federal Reserve Chairman Jerome Powell is navigating through increased economic uncertainty. The focus on real-time data, which can be unreliable, heightens the risk of policy missteps as the Fed remains data-dependent.
Support for the GBP/USD pair is bolstered by positive market sentiment in the UK, following President Donald Trump’s decision to temporarily exempt UK exporters from the new 50% US tariffs on steel and aluminium, maintaining the previous tariff rate of 25%.
The Nonfarm Payrolls release, issued by the US Bureau of Labor Statistics (BLS), is a critical economic indicator representing the number of jobs added in the US non-agricultural sector. This data is known for its potential to cause significant market volatility due to its importance in economic forecasting. High readings are generally seen as bullish for the US Dollar (USD), while lower numbers can be bearish. The overall market reaction often hinges on how this data compares with previous months’ figures and the current unemployment rate.
Next release:
Fri Jun 06, 2025 12:30
Frequency:
Monthly
Consensus:
130K
Previous:
177K
Source:
US Bureau of Labor Statistics
The monthly US Nonfarm Payrolls report is a primary gauge for assessing the overall health of the economy and is closely watched by both policymakers and traders. This indicator not only reflects current economic conditions but also influences the Federal Reserve’s monetary policy decisions, which in turn affect currency values. Unexpected results in the data can lead to significant USD fluctuations, making this a highly anticipated event for forex traders worldwide.
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