Disappointing US jobs data slashes September Fed rate hike odds to below 45%, weakening the USD and supporting sterling.
GBP/USD trades at 1.3495, up 0.04% on Monday, struggling to breach the 1.3500 level after Friday’s US Nonfarm Payrolls report showed a loss of 23K jobs in July. The data heightened concerns over a US labor market slowdown, reducing expectations for Federal Reserve tightening.
Markets now price in less than a 45% chance of a September rate hike, down from 67% a week earlier. The shift has curbed the USD’s rebound, though geopolitical tensions and potential oil price rises could limit further declines.
Investors await US inflation data for fresh clues on the Fed’s next move. Stronger-than-expected figures may revive hawkish bets, while easing pressures could extend GBP/USD gains.