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GBP/USD Exchange Rate Trading at 2020 Lows Ahead of US Payroll Report

Pound US Dollar

GBP/USD Exchange Rate Muted as All Eyes on US Payrolls

The Pound US Dollar (GBP/USD) exchange rate is struck in a narrow range this morning as markets brace for the publication of the US non-farm payroll report later this afternoon.

At the time of writing the GBP/USD exchange rate is trading at around $1.2933, virtually unchanged from today’s opening rate, and just shy of a 2020 low.

US Dollar (USD) to Accelerate on Strong Payroll Print?

The US Dollar (USD) remains well supported this morning as markets await the release of the latest US payroll report later this afternoon.

The current market consensus is that payrolls will rise by 160,000 in January, up from 145,000 in December.

But there is some speculation they could print higher in the wake of Wednesday’s bumper ADP employment report, which suggested that the US economy added 291,000 jobs last month.

However analysts at TDS believe the ADP figures will have little bearing on the headline payroll figures and are instead predicting they will print slightly below expectations.

In a note to clients TDS said:

‘Despite Jan’s surge, we don’t extrapolate the ADP gains into our payrolls forecast. We still expect a below consensus 150k for NFP on Friday. We are neutral relative to consensus on the unemployment rate and earnings.’

USD investors will also be paying close attention the average earnings figures this afternoon after December’s payrolls were undermined by wage growth slumping to an 18-month low.

GBP/USD Exchange Rate Forecast: Stagnating GDP to Drag on Sterling?

Looking ahead to next week, the Pound US Dollar (GBP/USD) exchange rate is likely to come under fire in the first half of the session with the publication of the UK’s latest GDP figures.

These are likely to show that that UK growth stagnated in the last quarter of 2019, as the economy was paralyzed by heightened political uncertainty in the run up to the General Election.

Meanwhile in focus for USD investors will be the publication of the latest US retail sales figures at the end of the week.

The release may send the US Dollar higher if they show that sales growth began to pick up steam again at the start of 2020.