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GBP/USD slips as Middle East risks keep USD supported

USD strength is being tempered by reduced odds for a September Fed hike, after US jobs data pointed to a cooling labor market.

Reported · Written up by our desk · Major Pairs

FXStreet reports the GBP/USD pair edged lower at the start of a new week, moving away from an over three-week high that hovered just above the 1.3500 level touched on Friday.

The outlet links the firmer US dollar to persistent Middle East uncertainties, including efforts to reopen the Strait of Hormuz. It also notes investors are looking to additional US data, including the latest inflation figures later in the week, as well as incoming geopolitical headlines that could swing USD direction.

FXStreet says US monthly jobs data showed the economy lost 23,000 jobs in July, and the prior month’s figure was revised lower to 20,000 from 57,000. It also highlights that traders have cut their pricing for a September rate increase to less than a 45% chance, down from 67% a week earlier.

Still, the piece adds that investors assign a higher probability of at least one 25-basis-point increase before year end, citing concerns that recovering oil prices could reignite inflation pressures. FXStreet also flags a prelim UK Q2 GDP release on Thursday as a potential driver for the British pound, while warning traders to be cautious about new bullish bets as the near two-week uptrend faces a mixed fundamental backdrop.

Latest closeGBP/USD 1.345 ▼0.1%

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