GBP/USD saw a rise above 1.2800 after the release of US NFP figures on Friday. The positive data sparked a risk rally in the market, leading to increased optimism among investors. This surge in market sentiment was primarily driven by renewed hopes of a rate cut by the Federal Reserve.
Looking ahead to the next week, investors will closely monitor various events such as Fed Chair Powell’s appearance, US CPI data, and UK industrial activity. These economic indicators will provide further insights into the health of the respective economies and may impact currency movements.
The US NFP report showed an increase of 206,000 new jobs in June, surpassing the forecast of 190,000. However, the previous month’s figures were revised downward, raising concerns about the overall labor market situation. Additionally, US Average Hourly Earnings growth slowed to 3.9% year-over-year, while the Unemployment Rate ticked higher to 4.1%.
Despite the positive NFP report, investors are focusing on other factors such as rising unemployment, cooling wages, and revisions to previous job reports. This has led to speculation that the Fed might consider implementing rate cuts in the near future. Market indicators are currently pricing in an 80% likelihood of a quarter-point rate trim by September 18.
In the UK, the recent Parliamentary Election resulted in Kier Starmer becoming the new Prime Minister, replacing Rishi Sunak. GBP traders are now awaiting the upcoming UK Industrial Production figures for May, which are expected to show a rebound after a contraction in April.
Overall, the GBP/USD pair has been on a winning streak, with the exchange rate climbing above 1.2800. The technical outlook suggests further bullish momentum, as the pair has gained 1.62% from its recent low. Market participants will continue to monitor key economic indicators and events in the coming weeks to assess the potential impact on currency movements.
It is important for investors to conduct thorough research and analysis before making any investment decisions. The economic landscape can be volatile, and staying informed about market developments is crucial for successful trading. Additionally, monitoring central bank policies and economic data releases can provide valuable insights into potential currency movements.