GBP/USD slips as robust US jobs data dampens expectations of Fed rate cut
- The British Pound is on track for a weekly rise of over 0.80%, buoyed by a general weakening of the US Dollar earlier in the week.
- The US economy outperformed expectations by adding 139,000 jobs in May, bolstering the Federal Reserve’s cautious approach to interest rate cuts.
- The US Dollar Index (DXY) saw a resurgence, climbing 0.58% to 99.28, marking its highest point in two days.
During the North American trading session, the GBP/USD pair experienced a decline, dropping over 0.30% following the robust US jobs report that confirmed the economy’s resilience. The pair was trading at 1.3526 after reaching a daily peak of 1.3586.
The British Pound falls below 1.3550 as robust US NFP data boosts the Dollar, tempering expectations for dovish Fed policies
May’s US Nonfarm Payroll data surpassed the anticipated 130,000 jobs by adding 139,000, although it was a decrease from April’s revised figure of 147,000. Despite a softening job market, the better-than-expected results reduced speculation about imminent Federal Reserve rate cuts.
The unemployment rate held steady at 4.2%, while the Federal Government reduced its workforce by 10,000 positions last month.
With a light economic calendar in the UK, GBP/USD traders focused primarily on US developments. Nonetheless, the Pound is poised to end the week with gains exceeding 0.80%, driven by widespread weakness in the US Dollar.
However, the Dollar has regained some strength, as indicated by the rise in the US Dollar Index (DXY). This index, which measures the US Dollar against a basket of six major currencies, increased by 0.58% to 99.28, reaching its highest level in two days.
Looking ahead, next week’s UK economic calendar will feature job data and GDP figures for April. Meanwhile, the US will release key economic indicators including the Consumer Price Index (CPI), Producer Price Index (PPI), and the University of Michigan Consumer Sentiment Index.
British Pound Performance This Week
The table below highlights the percentage change of the British Pound (GBP) against other major currencies this week, with notable strength against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.32% | -0.40% | 0.75% | -0.35% | -0.75% | -0.76% | 0.08% | |
| EUR | 0.32% | -0.08% | 1.07% | -0.03% | -0.43% | -0.46% | 0.39% | |
| GBP | 0.40% | 0.08% | 1.22% | 0.05% | -0.35% | -0.38% | 0.46% | |
| JPY | -0.75% | -1.07% | -1.22% | -1.09% | -1.49% | -1.51% | -0.76% | |
| CAD | 0.35% | 0.03% | -0.05% | 1.09% | -0.40% | -0.43% | 0.42% | |
| AUD | 0.75% | 0.43% | 0.35% | 1.49% | 0.40% | 0.02% | 0.90% | |
| NZD | 0.76% | 0.46% | 0.38% | 1.51% | 0.43% | -0.02% | 0.85% | |
| CHF | -0.08% | -0.39% | -0.46%</td
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