British Pound eases below 1.3450 as markets brace for the US Nonfarm Payrolls report
The British Pound (GBP) nurses minor gains against the (USD) for the second consecutive day on Friday, with the GBP/USD retreating to levels just below 1.3450 at the time of writing.
On Friday, the British Pound (GBP) experienced minor gains against the US Dollar (USD), settling just below 1.3450. However, the GBP/USD pair remains confined within the 1.3400-1.3500 range since the start of August. The US Dollar (USD) gained traction on Thursday, driven by a Financial Times report quoting sources close to the US Federal Reserve (Fed) regarding possible September interest rate hikes if inflation data remains high.
Investors remain cautious about making significant directional bets on the USD before the release of the July Nonfarm Payrolls (NFP) report. The market anticipates an increase of 80,000 new jobs from June's 57,000, with the Unemployment Rate remaining steady at 4.2% and wages growing at a steady 0.3% month-over-month and 3.5% year-over-year.
Analysts at UOB Group express that the recent GBP/USD advance has lost momentum, as the pair struggles to break and hold above the crucial resistance level of 1.3555. A breach of the 1.3410 level would indicate that the 1.3555 mark is not in sight. The Nonfarm Payrolls release, published by the US Bureau of Labor Statistics (BLS), presents the monthly change in jobs created in non-agricultural businesses.
A high reading is considered bullish for the USD, while a low reading is bearish. The market's reaction depends on how traders interpret all data in the BLS report, including payroll numbers, Unemployment Rate, and wage growth.
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