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Sterling falls for sixth straight session versus the US dollar
GBP/USD slid near 1.3300 as Dollar strength was driven by a Middle East risk premium and a surprise drop in US jobless claims to 187K.
Sterling extended its losing streak to a sixth session against the US dollar, with GBP/USD trading near 1.3300 after a peak just under 1.3400 earlier in the day. FXStreet said the lack of any UK-specific headline, data release, fiscal announcement, or policy remark helped explain why the move appeared to be led entirely by Dollar demand.
The article points to two main engines behind the Dollar bid, starting with reports tied to the Gulf war and a threatened attack on Iran that pushed Brent above $101. It also cited an intraday turn in risk sentiment linked to a repricing of the cost of the artificial intelligence build-out.
A second, larger driver was the US labor market, where initial jobless claims fell to 187K versus a 212K consensus and 209K prior, the lowest weekly reading since 1969. According to FXStreet, GBP/USD gave up about 50 pips in roughly two and a half hours after the 12:30 GMT release as markets leaned toward further Federal Reserve tightening.
Rate pricing now implies a hold at next Wednesday's Federal Reserve meeting with a 66.9% probability, and a hike with a 33.1% probability, FXStreet added. The same source said the odds of at least one increase rose to 80.6% by mid-September, 86.6% by late October, and 92.2% by December, with two hikes at 60.0% for the December meeting.
FXStreet also noted that not one meeting on the visible curve prices a cut, leaving the Bank of England side without a matching offset for Sterling during the session.
Latest closeBrent $100.54 ▲6.9%|GBP/USD 1.331 ▼0.5%