Trending
gbpusd
Source: Newsmaker.id
The GBP/USD pair strengthened during Friday's trading (Oct 2) after the US dollar lost some momentum following a US labor market report that was significantly weaker than anticipated. The soft employment data led investors to scale back expectations for a Federal Reserve interest rate hike at the October meeting.
US Nonfarm Payrolls increased by only 29,000 jobs in September, well below the market forecast of approximately 90,000. The unemployment rate rose to 4.2% from 4.1%, while average wage growth slowed to 3.0% year-on-year. These figures reinforced signals that the US labor market is beginning to lose momentum.
The weak labor report heightened market expectations that the Fed would keep interest rates unchanged at the October 27–28 meeting. Market participants assigned an approximately 80% probability to rates remaining steady—a figure that rose following the NFP release. This scenario reduced some support for the dollar and allowed the pound room to recover.
However, gains in GBP/USD remained capped by high US bond yields. The 10-year Treasury yield climbed back to around 5.28%, having previously touched a 24-year high near 5.34%. Elevated yields continued to support the dollar despite the weaker employment data.
The market has also not entirely ruled out further tightening by the Fed. Inflation remains a primary concern for the central bank, while high energy prices resulting from the conflict in the Middle East could keep price pressures elevated. Consequently, although an October rate hike appears increasingly unlikely, the possibility of tighter policy later in the year remains a focus for investors.
For the pound sterling, the future direction of movement depends not only on the dollar but also on expectations regarding Bank of England policy. High energy costs and the state of the UK's economic growth will remain key factors monitored by the market as it assesses how long the Bank of England (BoE) can maintain its monetary policy stance.
In the short term, the GBP/USD pair could sustain its recovery momentum if the dollar continues to weaken and Treasury yields begin to fall. Conversely, should US inflation re-accelerate or expectations for Federal Reserve rate hikes rise again, the dollar could regain support, thereby capping the pound's gains.