Pound Sterling Holds Steady as Markets Await Key US Data
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The Pound Sterling trades within a tight range against the US Dollar as markets anticipate pivotal US economic data. Expectations for the US Nonfarm Payrolls and Manufacturing PMI reports will shape the Fed's rate path. Meanwhile, investors are dialing back on aggressive BoE rate cut bets as UK inflation projections climb.
Pound Sterling Holds Steady as Markets Await Key US Data
The Pound Sterling (GBP) is trading flat around 1.2900 against the US Dollar (USD) in Friday’s London session. This comes as traders wait for the much-anticipated Nonfarm Payrolls (NFP) report in the United States, scheduled for release at 12:30 GMT. The labor market data could heavily influence expectations for the Federal Reserve’s (Fed) upcoming rate decisions.
Market Anticipates a Modest NFP Report
Analysts expect the October NFP to show an addition of 113,000 jobs, a significant slowdown from the 254,000 jobs created in September. Economists forecast that the US Unemployment Rate will hold steady at 4.1%. Diverging indicators complicate this outlook: Wednesday’s ADP Employment Change surprised with 233,000 new private-sector jobs, suggesting labor market resilience. Further, Initial Jobless Claims for late October were lower than expected, indicating stable job demand.
In Friday’s North American session, investors will also eye Average Hourly Earnings, forecasted to rise by 0.3% month-on-month, and the ISM Manufacturing PMI, expected to tick up slightly to 47.6.
Pound Sterling Holds Ground as BoE Bets Adjust
The Pound Sterling is stabilizing after a sharp dip on Thursday. Traders are reassessing the likelihood of aggressive rate cuts from the Bank of England (BoE), especially following the UK’s Autumn Forecast Statement, which announced a hefty 40 billion pounds tax increase, the largest since 1993. Fiscal plans are expected to support public spending and investment, as well as address inflation, with the Office for Budget Responsibility revising its inflation projections upward to 2.5% for 2024 and 2.6% for 2025.
The BoE is now expected to enact just one rate cut across its remaining meetings this year. Reuters estimates an 80% likelihood that the BoE will cut its policy rate by 25 basis points in November, though analysts at Bank of Montreal caution that the BoE may hold steady given inflation pressures and recent budget measures.
Technical Analysis: GBP/USD in Bearish Territory
The Pound Sterling currently trades near an 11-week low against the US Dollar at around 1.2850, below the 50-day Exponential Moving Average (EMA) at 1.3060. The GBP/USD has also broken through its Rising Channel formation, indicating a potential shift to bearish momentum. The 14-day Relative Strength Index (RSI) remains within the 20.00-40.00 range, suggesting further downside potential.
Looking ahead, Pound Sterling bulls may find support near 1.2800. On the upside, resistance stands around the 50-day EMA at 1.3060, which could act as a pivotal level in determining the currency pair’s direction.
Pound Sterling Holds Steady as Markets Await Key US Data
The Pound Sterling (GBP) is trading flat around 1.2900 against the US Dollar (USD) in Friday’s London session. This comes as traders wait for the much-anticipated Nonfarm Payrolls (NFP) report in the United States, scheduled for release at 12:30 GMT. The labor market data could heavily influence expectations for the Federal Reserve’s (Fed) upcoming rate decisions.
Market Anticipates a Modest NFP Report
Analysts expect the October NFP to show an addition of 113,000 jobs, a significant slowdown from the 254,000 jobs created in September. Economists forecast that the US Unemployment Rate will hold steady at 4.1%. Diverging indicators complicate this outlook: Wednesday’s ADP Employment Change surprised with 233,000 new private-sector jobs, suggesting labor market resilience. Further, Initial Jobless Claims for late October were lower than expected, indicating stable job demand.
In Friday’s North American session, investors will also eye Average Hourly Earnings, forecasted to rise by 0.3% month-on-month, and the ISM Manufacturing PMI, expected to tick up slightly to 47.6.
Pound Sterling Holds Ground as BoE Bets Adjust
The Pound Sterling is stabilizing after a sharp dip on Thursday. Traders are reassessing the likelihood of aggressive rate cuts from the Bank of England (BoE), especially following the UK’s Autumn Forecast Statement, which announced a hefty 40 billion pounds tax increase, the largest since 1993. Fiscal plans are expected to support public spending and investment, as well as address inflation, with the Office for Budget Responsibility revising its inflation projections upward to 2.5% for 2024 and 2.6% for 2025.
The BoE is now expected to enact just one rate cut across its remaining meetings this year. Reuters estimates an 80% likelihood that the BoE will cut its policy rate by 25 basis points in November, though analysts at Bank of Montreal caution that the BoE may hold steady given inflation pressures and recent budget measures.
Technical Analysis: GBP/USD in Bearish Territory
The Pound Sterling currently trades near an 11-week low against the US Dollar at around 1.2850, below the 50-day Exponential Moving Average (EMA) at 1.3060. The GBP/USD has also broken through its Rising Channel formation, indicating a potential shift to bearish momentum. The 14-day Relative Strength Index (RSI) remains within the 20.00-40.00 range, suggesting further downside potential.
Looking ahead, Pound Sterling bulls may find support near 1.2800. On the upside, resistance stands around the 50-day EMA at 1.3060, which could act as a pivotal level in determining the currency pair’s direction.