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British pound rises above 1.3500 after soft US jobs report

GBP/USD was near 3-week highs around 1.3506, as markets cut the probability of a September Fed hike to 42.1% after July payrolls fell short.

Reported · Written up by our desk · Major Pairs

The British pound strengthened against the US dollar after a weak US Nonfarm Payrolls report led traders to scale back expectations for Federal Reserve rate hikes, lifting GBP/USD to around 1.3506 near three-week highs.

FXStreet reported the US economy lost 23K jobs in July, below the 80K increase expected, while June’s gain was revised down to 20K from 57K. The US unemployment rate, however, fell to 4.1% from 4.2%, and the softer labor-market data weighed on the dollar and US Treasury yields.

The US Dollar Index was around 99.50, down nearly 0.45% on the day, while the benchmark 10-year Treasury yield fell to about 4.60%, roughly eight basis points below its intraday high of 4.68%. According to the CME FedWatch Tool, traders assigned about a 42.1% probability to a September rate hike, down from 67% a week earlier.

The article also tied the broader move to easing inflation concerns after a recent drop in oil prices, with West Texas Intermediate near $76 per barrel and down nearly 10% on the week. Traders next focused on the following week’s US Consumer Price Index data for further signals on the inflation outlook.

Latest closeGBP/USD 1.345 ▼0.1%|Dollar index 99.98 ▲0.3%

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