GBP/USD rebounds swiftly from 2-1/2-month lows post-NFP, upside seems capped
- GBP/USD staged a goodish rebound from two-and-half-month lows post-NFP.
- The US economy added 850K new jobs in June as against 700K anticipated.
- The upbeat reading was offset by an unexpected jump in the jobless rate.
The GBP/USD pair reversed an early European session dip to the lowest level since mid-April and rallied over 40 pips following the release of the US monthly jobs data.
The headline NFP print showed that the US economy added 850K new jobs in June as against 700K expected. Adding to this, the previous month's reading was also revised higher to 583K from 559K reported earlier.
The positive readings, however, were offset by an unexpected rise in the jobless rate to 5.9% from 5.8% in May. The disappointment, along with a steep decline in the US Treasury bond yields, weighed on the US dollar.
This, in turn, was seen as a key factor that prompted some short-covering move around the GBP/USD pair. That said, worries about the spread of the more contagious Delta variant of the coronavirus should cap the upside.
Nevertheless, the GBP/USD pair remains on track to end the week with heavy losses and seems poised to prolong its recent downward trajectory. Hence, any subsequent positive move might still be seen as a selling opportunity.
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Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
