Pound US Dollar (GBP/USD) Exchange Rate Soars amid Higher-than-Expected US Jobless Claims
(Article updated 16:23, 8/6/23) The Pound US Dollar (GBP/USD) exchange rate is soaring this afternoon, following the latest US initial jobless claims.
Printing at 261,000 and reflecting a sharp increase over the previous week’s 233,000, the data is weighing heavily on the ‘Greenback’. As it may indicate signs of loosening in the US labour market, it’s likely prompting USD investors to lean more towards a pause at the Federal Reserve’s June meeting.
With this in mind, the ‘Greenback’ is struggling against most major peers.
At the time of writing, GBP/USD is trading at around US$1.2540, rising by just under 0.8% from today’s opening rates.
Original article continues below:
Pound US Dollar Exchange Rate Firms on BoE Rate Hike Bets
The Pound US Dollar exchange rate is firming this morning, as elevated rate hike bets continue to support Sterling.
At the time of writing, GBP/USD is trading at around US$1.2470, an increase of roughly 0.2% from the morning’s opening rates.
Pound (GBP) Mixed amid Elevated Rate Hike Bets
The Pound (GBP) is seeing mixed trade this morning, as investors continue to bet on additional rate hikes from the Bank of England (BoE).
However, the data drought is continuing. Because of this, any gains that Sterling may be searching are likely being capped.
Furthermore, the Recruitment and Employment Confederation published a report this morning. In this, the REC found indications that the UK labour market may be cooling.
They found that growth in starting salaries had fallen to its lowest levels since January 2021. Furthermore, their gauge of staff demand fell to a five-month low.
Clare Warnes, at KPMG UK, commented:
‘The jobs market remains subdued, with the latest survey results showing dampened hiring activity amid ongoing economic concerns. Overall vacancy growth slowed for the third month as businesses delayed hiring decisions, and permanent staff appointments fell for the eighth month in a row as many employers stick to temps.’
US Dollar (USD) Limited by Thin Data Calendar
The US Dollar (USD) is seeing limited trade this morning, amidst a lack of pertinent data releases. Because of this, the ‘Greenback’ appears unable to gain ground against its peers.
Bets on further tightening from the Federal Reserve are in flux as well. While some investors have continued to bank on an additional 25bps hike in June, the overriding perception is of a hold.
As such, investor focus may have shifted toward data releases coming next week, such as the Fed’s next interest rate decision.
With this in mind, it seems that the ‘Greenback’ is in something of a consolidatory mode. Chris Turner, Global Head of Markets and Regional Head of Research for UK & CEE at ING, explains:
‘For the near term, it looks like the dollar can hold the majority of its recent gains into next Wednesday’s FOMC meeting – though the release of the US May CPI next Tuesday will be a big market driver too.’
Elsewhere, a tepid market mood could be serving to underpin the safe-haven currency against staunch losses.
GBP/USD Exchange Rate Forecast: Lack of Data to Mute Pairing?
Looking ahead for the US Dollar, the data calendar is relatively light through to the end of the week. Because of this, significant movements may be unlikely.
However, if the market mood turns sombre, the safe-haven ‘Greenback’ could gain ground against riskier assets.
Elsewhere, Federal Reserve rate hike bets could continue to support the US Dollar ahead of next week’s impactful data.
For the Pound, the dearth of data continues through to the end of the week’s session. As such, market dynamics and mood are likely to remain the main drivers of movement.