GBP/USD Exchange Rate Steady Ahead of Key Payrolls Report
The Pound US Dollar (GBP/USD) exchange rate is currently rangebound this morning as markets brace for the publication of the latest US payrolls report.
At the time of writing the GBP/USD exchange rate is virtually unchanged this morning at $1.2108, leaving the pairing trading just shy of the 28-month low struck earlier in the week.
US Dollar (USD) Poised to Slide on US Payrolls Slowdown
The outlook for the US Dollar (USD) looks negative today as markets gear up for the publication of the latest US non-farm payroll report later this afternoon.
The top-tier US releases is forecast to show that employment growth slowed last month, with payrolls rising by 164,000 against the 224,000 jump reported in June.
This is expected to leave the US unemployment rate at 3.7%, slightly above the 49-year low of 3.6% struck in April and May.
Whilst the drop in payrolls is expected to be in line with recent trends, the fall could prompt speculation that there is room for the Federal Reserve to lower interest rate again this year.
UK Politics Continue to Weigh on the Pound (GBP)
The Pound (GBP) meanwhile continues to be driven by political developments, with Sterling struggling to find support following the Brecon and Radnorshire by-election.
The election saw the incumbent Conservative Chris Davies unseated by Liberal Democrat Jane Dodds by 1,425 votes.
The loss is a major blow to Boris Johnson as it reduces his majority in Parliament to just one, with analysts suggesting this could further increase the odds of a General election being called in in the months to come.
GBP/USD Exchange Rate Forecast: Potential Contraction in UK GDP to Drive Fresh Sterling Sell-Off?
Looking ahead to next week, the Pound US Dollar (GBP/USD) exchange rate faces the threat of falling to fresh lows with the publication of the latest UK GDP figures.
Analysts suspect that these might show that UK economic growth contracted in the second quarter, after a glut of gloomy data in recent month, an outcome which is likely to spark renewed selling of Sterling.
In the meantime, the focus for USD investors at the start of next week’s session will likely be on the ISM non-manufacturing PMI, which could lend some support to the US Dollar if the US service sector continued to expand at a robust pace in July.
On top of this, rising trade tensions in the wake of Donald Trump’s threat to impose fresh tariffs on China is likely to act as a constant draw for the safe-haven US Dollar.