The GBPUSD currency pair is falling back toward a key support level after a weaker-than-expected UK labor market report. While the U.S. dollar held relatively steady following strong U.S. jobs data and rising Treasury yields. Traders are now focused on upcoming macro publication tomorrow - U.S. CPI release, today's results of U.S.-China trade talks, and the Federal Reserve's decision next week, which could provide the necessary catalyst for renewed dollar strength—if the tone is hawkish enough.
In the UK, the latest data revealed rising unemployment (4.6%) and a sharp decline in payrolls—the largest monthly drop since May 2020. Wage growth also cooled slightly, missing forecasts and showing signs of easing. This labor market softness has prompted a more dovish shift in Bank of England expectations, with markets now pricing in 50 basis points of rate cuts by year-end, up from around 40 bps before the report. These developments further pressure the pound and support the idea of easier policy ahead. The British pound declined 0.50% against the US dollar. The currency is now among the weakest G10 currencies.
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