Pound Sterling slides below 1.3100 after strong US job data

The Pound Sterling (GBP) slides below the round-level support of 1.3100 against the US Dollar (USD) in Friday’s New York session. The GBP/USD pair extends its losing spree for the fourth trading session as market expectations for the Federal Reserve (Fed) to reduce interest rates by 50 basis points (bps) again have waned after the release of the upbeat United States (US) Nonfarm Payrolls (NFP) report for September. 

The CME FedWatch tool shows that the probability of the Fed cutting interest rates further by 75 basis points (bps) by year-end has almost waned after the US NFP data release. Read more…

British Pound’s outlook improves with its economic outlook – DBS

GBP/USD has the potential to trade within a higher 1.30-1.40 range through 2025, DBS’ FX analysts Philip Wee and Chang Wei Liang note.

“In August, the 10Y yield differential between UK Gilts and US Treasuries turned positive for the first time since Sep 2023, indicating that the Bank of England would reduce interest rates slower than the Fed. The IMF noted that the UK economy was recovering faster than expected after a mild recession in 2023.” Read more…

GBP/USD: BOE-led weakness – OCBC

The Pound Sterling (GBP) fell after BoE Governor Bailey unexpectedly spoke about adopting a more aggressive easing stance. Pair was last at 1.3165 levels., OCBC’s FX analysts Frances Cheung and Christopher Wong note.  

“In an interview with the Guardian, he said that the BoE could become a ‘bit more aggressive’ and ‘a bit more activist’ in its approach to cutting rates if the news on inflation continued to be good.” Read more…