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Pound hovers near 1.3500 as Fed hike odds fade after weak US jobs data

GBP/USD was around 1.3495 after the US reported July Nonfarm Payrolls losses of 23K, cutting chances of a Fed rate hike in September to below 45% from about 67% a week earlier.

Reported · Written up by our desk · Major Pairs

GBP/USD traded around 1.3495 on Monday, holding near its recent highs but struggling to sustain moves above the 1.3500 level. FXStreet linked the hesitation to a weaker US Dollar after disappointing US employment data following Friday's Nonfarm Payrolls report.

The report showed the US economy lost 23K jobs in July, raising concerns about a slowdown in the labor market and lowering expectations for additional Federal Reserve tightening. Markets now price in less than a 45% chance of a Fed interest rate hike in September, down from around 67% a week earlier, limiting the Dollar's ability to rebound and keeping cable supported near current levels.

The Greenback also faces support and headwinds from geopolitical uncertainty in the Middle East and around the Strait of Hormuz, along with the possibility of an oil price recovery that could keep US inflation pressures elevated. Attention next turns to upcoming US inflation figures that could shift rate expectations.

In the UK, investors are awaiting the preliminary estimate of second-quarter GDP due Thursday, with expectations for growth to slow to 0.4% in Q2 from 0.6% in Q1. Brown Brothers Harriman expects UK growth momentum to cool, and any surprise in the data could help determine whether GBP/USD gains enough support to establish a more durable break above 1.3500.

Latest closeGBP/USD 1.345 ▼0.1%

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