Rising Fed rate hike expectations lift the USD, pushing GBP/USD to a three-week low after stronger-than-expected US jobs data.
The GBP/USD pair fell to near 1.3338 in European trading on Monday, hitting a fresh three-week low of 1.3316. The decline comes as the USD strengthens amid growing expectations of a Federal Reserve interest rate hike this year.
The US Dollar Index (DXY) held onto gains near 100.10, supported by a 74.2% probability of at least one Fed rate increase, up from 45.2% a week ago. The shift follows Friday’s US Nonfarm Payrolls report, which showed 172K jobs added in May, far exceeding the 85K estimate.
Major catalysts for GBP/USD this week include upcoming US consumer price data and Fed commentary, which could further influence rate expectations.