Pound US Dollar (GBP/USD) Exchange Rate Flat ahead of US NFP Data
The Pound US Dollar (GBP/USD) exchange rate is trading within narrow boundaries this morning, amid a quiet morning of trade ahead of the afternoon’s US non farm payroll data.
At the time of writing, GBP/USD is trading around US$1.2208, showing little movement from the morning’s opening rates.
GBP to Remain Pressured by Lack of Data?
The Pound (GBP) is likely to continue its current trend over today’s session, as a lack of data releases limits Sterling’s appeal.
As such, the Pound is unlikely to see much in the way of directional trade in the short term, due to a lack of movement catalysts.
However, thus far this morning, the increasingly risk-sensitive Pound has enjoyed modest support against some peers due to a cautiously optimistic market mood.
The UK’s economic outlook is likely to remain in focus for investors too. As the outlook has deteriorated in recent weeks, further analysis may weigh on GBP rates.
Additionally, investors may continue to pare back their bets on further interest rate hikes from the Bank of England (BoE).
Inflationary pressures have shown signs of easing recently, which has prompted investors to consider the BoE to be at the end of its current tightening cycle.
USD To Weaken on Signs of Labour Market Slack?
The US Dollar (USD) is trading quietly so far this morning, as investors await the afternoon release of September’s non farm payrolls data.
Economists forecast that the number of jobs created in September will have fallen, from 187000 to 170000. If this prints accurately, the US Dollar could end the week on a downbeat note, as it may indicate signs of slack in the labour market.
This would, in turn, lead USD investors to pare back their bets on further interest rate hikes from the Federal Reserve.
Similarly, a trend towards optimistic trade could be limiting the safe-haven ‘Greenback’ so far this morning, as investors look to riskier assets.
Looking further ahead, the US Dollar is likely to start next week slowly, due to a light data calendar. With this in mind, risk appetite is likely to be the main driver of movement for USD exchange rates.
As a safe-haven currency, the ‘Greenback’ could gain ground against its peers if the market mood sours. However, if trading conditions improve, it may struggle against riskier assets such as the Pound.