- GBP/USD stays on the front foot for the second consecutive day after reversing from weekly top.
- Easing British labor shortage contrasts with housing market pressure to challenge BoE rate speculations.
- Fed’s June rate hike slips off the table with July likely being the last rate hike.
- Cable buyers may have limited upside room as UK politics, BoE clues probing Pound Sterling optimists.
GBP/USD buyers occupy driver’s seat around 1.2450, despite marking a slow run towards the north heading into Thursday’s London open. In doing so, the Cable pair buyers cheer the receding odds of a Fed rate hike in June while early signals for the Bank of England’s (BoE) interest rate guide appear mixed.
Earlier in the day, the UK’s Recruitment and Employment Confederation (REC) released a survey, funded by the global quant giant KPMG, saying that Britain's labor market cooled further in May as starting salaries for permanent staff rose at the weakest pace in over two years. It should be noted that the recruiters included in the survey are the ones being closely watched by the Bank of England (BoE) and hence the results appear more important for the GBP/USD pair traders.
On the contrary, another poll of the Royal Institution of Chartered Surveyors (RICS) hints that the measure of new buyer inquiries rose to a net balance of -18, the least negative figure since -14 in May 2022, and up from -34 in April, per Reuters.
Elsewhere, UK Prime Minister Rishi Sunak fails to mark any major achievements during this diplomatic US visit and prods the GBP/USD buyers. “Rishi Sunak confirming he isn’t talking about a UK-US free trade deal with Joe Biden is the final nail in the coffin of promises he and others made to win the 2016 Brexit referendum,” reports UK Mirror.
Apart from the British catalysts, the latest increase in the market’s bets on the Federal Reserve’s 25 bps rate hike in July increased, even as the June Federal Open Market Committee (FOMC) is likely to keep the rates unchanged, also challenge the GBP/USD upside.
That said, the risk profile soured and added negatives for the GBP/USD, which it ignores, on the latest Organisation for Economic Co-operation and Development (OECD) report that said that the global economy is set for a weak recovery over the coming years as persistent core inflation and tighter monetary policy weigh on demand. The OECD report also mentioned, “UK growth of 0.3% in 2023 and 1.0% in 2024 (previously -0.2% in 2023 and 0.9% in 2024).”
Amid these plays, the US 10-year bond coupons remain mostly unchanged at 3.79% by the press time whereas the two-year yields grind higher to 4.54% as we write. While portraying the market’s mood, Wall Street closed mixed and S&500 Futures struggle for clear directions.
Looking ahead, a light calendar in the UK and the US, apart from the weekly Initial Jobless Claims, may fail to provide any major challenge to the Pound Sterling buyers. However, risk catalysts and the bond market moves should be closely observed for clear directions.
Technical analysis
GBP/USD grinds within a 100-pip broad one-month-old symmetrical triangle, currently between 1.2500 and 1.2400, as bulls flex muscles.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD loses traction, retreats below 1.0600
EUR/USD lost its recovery momentum and declined below 1.0600 in the American session on Friday, erasing a portion of its daily gains in the process. Nevertheless, the risk-positive market atmosphere after PCE inflation data helps the pair limit its losses.
GBP/USD turns negative on the day below 1.2200
GBP/USD reversed its direction and slumped below 1.2200 in the American session on Friday after rising above 1.2270 earlier in the day. Position readjustments and profit-taking on the last trading day of the quarter seems to be weighing on Pound Sterling.
Gold reverses direction, drops below $1,860
Following a steady rebound toward $1,880 on Friday, Gold price made a sharp U-turn and turned negative on the day near $1,860. Although the 10-year US T-bond yield is down more than 1%, XAU/USD struggles to find demand on the last day of Q3.
Polkadot Price Forecast: DOT reversal seems inevitable after 92% correction from all-time high
Polkadot price, in nearly two years, has shed 92.91% from its all-time high of $55.09. The massive downswing in DOT has pushed it down to levels that were last seen in October 2020. Hence, the chances of this altcoin forming a bottom and rallying are high.
Earnings beat triggers Nike to spike 9%
Nike (NKE) stock has surged over 9% in Friday’s premarket, climbing above $98 per share, following late Thursday’s fiscal first-quarter earnings release. Nike beat pessimistic earnings expectations by more than 23% and hiked its dividend by 9%.