GBP/USD Forecast and News
GBP/USD struggles to hold above 1.2800 after US jobs data
GBP/USD spiked above 1.2800 with the immediate reaction to the mixed US jobs report but retreated below this level. Nonfarm Payrolls in the US rose 206,000 in June. The Unemployment Rate ticked up to 4.1% and annual wage inflation declined to 3.9%.
Latest Pound Sterling News
GBP/USD Technical Overview
The Relative Strength Index (RSI) indicator on the 4-hour chart stays above 70 and points to overbought conditions. Nevertheless, investors are likely to ignore this technical development in case the US data triggers a USD selloff. 1.2800 (psychological level, static level) could be seen as next resistance before 1.2860 (Jun 12 high) and 1.2900 (psychological level, static level).
On the downside, supports could be seen at 1.2700 (20-day Simple Moving Average (SMA)), 1.2670 (50-day SMA) and 1.2650 (100-day SMA).
Fundamental Overview
Following Thursday's subdued action, GBP/USD regained its traction and reached its highest level in three weeks near 1.2780 on Friday. 1.2800 aligns as next immediate resistance for the pair as investors gear up for the key data releases from the US.
The Labour Party won a parliamentary majority in the UK general election, securing 411 seats in the 650-seat House of Commons and paving the way for Labour leader Keir Starmer to become the next prime minister. As this outcome was largely expected, it had little to no impact on Pound Sterling's valuation.
In the second half of the day, the US Bureau of Labor Statistics will release the June jobs report. Following the impressive 272,000 increase recorded in May, Nonfarm Payrolls are forecast to rise 190,000 in June. The Unemployment Rate is seen holding steady at 4% and the annual wage inflation, as measured by the change in the Average Hourly Earnings, is expected to decline to 3.9% from 4.1%.
Earlier in the week, the Manufacturing and the Services PMI reports published by the ISM pointed to a decline in these sectors' payrolls. Additionally, ADP Employment Change came in at 150,000 to miss the market expectation of 160,000, while the weekly Initial Jobless Claims edged higher to 238,000 in the week ending June 29, up from 234,000 in the previous week.
The selling pressure surrounding the US Dollar (USD) seen this week suggests that markets might have already priced in a disappointing NFP reading. The market positioning, however, shows that there is more room for further USD weakness in case the jobs report feed into expectations for a Federal Reserve (Fed) rate cut in September. According to the CME FedWatch Tool, there is still a 25% probability that the Fed leave the policy rate unchanged in September.
Hence, the immediate reaction to an NFP reading of 150,000, or lower, could fuel another leg higher in GBP/USD. On the flip side, a positive surprise could support the USD and limit the pair's upside heading into the weekend.
SPECIAL WEEKLY GBP/USD FORECAST
Interested in weekly GBP/USD forecasts? Our experts make weekly updates forecasting the next possible moves of the Pound-Dollar pair. Here you can find the most recent forecast by our market experts:
GBP/USD: Pound Sterling looks to US CPI and 1.2900 again Premium
The Pound Sterling (GBP) built on the previous week’s rebound against the US Dollar (USD), driving the GBP/USD pair back toward 1.2800, the highest level in nearly three weeks.
GBP/USD Big Picture
GBP/USD Bullish Themes
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Latest GBP Analysis
Editors' picks
EUR/USD retreats from daily highs, holds above 1.0800
EUR/USD loses traction but holds above 1.0800 after touching its highest level in three weeks above 1.0840. Nonfarm Payrolls in the US rose more than expected in June but downward revisions to May and April don't allow the USD to gather strength.
GBP/USD struggles to hold above 1.2800 after US jobs data
GBP/USD spiked above 1.2800 with the immediate reaction to the mixed US jobs report but retreated below this level. Nonfarm Payrolls in the US rose 206,000 in June. The Unemployment Rate ticked up to 4.1% and annual wage inflation declined to 3.9%.
USD/JPY falls hard toward 160.50, US NFP data awaited
USD/JPY is falling hard toward 160.50 in Asian trading on Friday, having reversed from near 161.40. The pair drops on renewed US Dollar weakness and Japanese verbal intervention, which rescues the Yen. The focus shifts to US jobs report.
Gold approaches $2,380 on robust NFP data
Gold intensifies the bullish stance for the day, rising to the vicinity of the $2,380 region following the publication of the US labour market report for the month of June. The benchmark 10-year US Treasury bond yield stays deep in the red near 4.3%, helping XAU/USD push higher.
WTI moves below $83.50 amid expectations of increased supply, US NFP awaited
WTI price inches lower as recent data showed that OPEC increased production in June. Negotiations between Israel and Hamas showing potential for improvement exert downward pressure on Oil prices. US Nonfarm Payrolls are expected to show an increase of 190,000 new jobs, down from the previous reading of 272,000.
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GBP/USD YEARLY FORECAST
How could GBP/USD move this year? Our experts make a GBP/USD update forecasting the possible moves of the pound-dollar pair during the whole year. Don't miss our 2024 GBP/USD forecast!
2024 GBP/USD FORECAST
In the GBP/USD Price Forecast 2024, our analyst, Dhwani Mehta, notes there are plenty of unknowns and looming uncertainties that make it difficult to convincingly predict the course of the Pound Sterling against the US Dollar (USD) in the year ahead. On both sides of the Atlantic, increased odds of a recession, a dovish pivot in the monetary policies and general elections are foreseen as the key factors driving the GBP/USD price action next year, barring any unprecedented geopolitical risks. Read more details about the forecast.
GBP/USD witnessed a rollercoaster ride in 2023 but the Pound Sterling managed to preserve the recovery gains seen in the first half of the year to a 15-month high of 1.3142.
MOST INFLUENTIAL POLITICAL EVENTS IN 2024 FOR GBP/USD
BoE policymakers continue to push back against expectations of rate cuts next year. However, deteriorating economic performance prompted money markets to begin pricing in four 25 bps rate cuts starting from the summer, anticipating the key rate to be slashed from 5.25% to as low as 4.25% by the end of 2024. The first cut is expected as early as June, to 5.0%.
Even though the Bank of England largely shrugged off a 0.3% contraction in GDP for October, the prospect of a recession in the run-up to a 2024 national election remains high.
A general election is expected next year in the US and the UK, which could fuel intense volatility around the GBP/USD pair. Amidst looming inflation and growth concerns, the political developments on both sides of the Atlantic are likely to be closely followed.
Influential Institutions & People for the GBP/USD
The Pound VS Dollar can be seriously affected by news or the decisions taken by two main central banks:
The Bank of England (BoE)
The Bank of England is the central bank of the United Kingdom. Established in 1694 and privately owned in the beginning, the Bank was nationalised in 1946 so now is completely owned by the UK government. BOE's main reason to be is to maintain monetary and financial stability in the country. Some of its other tasks are producing secure bank notes, operating asset purchase facility and keeping the inflation low and stable. The bank is overseen by the Court, named used to reffer the board of directors, and is accountable to Parliament and the public.
BOE Official Website, on Twitter and Facebook
The Federal Reserve Bank (Fed)
On the other
FED Official Website, on Twitter and Facebook
Andrew Bailey
Andrew Bailey is Governor of the Bank of England since 16 March 2020. He was announced as the new Governor of the BoE on 20 December 2019. Bailey was born in Leicester in 1959 and graduated from Queens' College with a BA in History and a PhD from the Faculty of History, University of Cambridge in 1985. Before becoming the Governor of the BOE, Andrew worked at the Bank in a number of areas, most recently as Executive Director for Banking Services and Chief Cashier, as well as Head of the Bank's Special Resolution Unit (SRU). Previous roles include Governor's Private Secretary, and Head of the International Economic Analysis Division in Monetary Analysis.
Bailey on BOE'S Profile and Wikipedia
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed's Profile and Wikipedia
BOE NEWS & ANALYSIS
ECB NEWS & ANALYSIS
About GBP/USD
The GBP/USD (or Pound / Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. The pair is also called 'The Cable', referring to the first Transatlantic cable that was crossing the Atlantic Ocean in order to connect Great Britain with the United States of America. This term originated in the mid-19th century, which makes it one of the oldest currency pairs.
Pound Sterling - US Dollar represents two economies: British and American (from United States of America). The Cable is a closely watched and widely traded currency pair where the Pound is the base currency and the US Dollar is the counter currency. For that reason, all the macroeconomic data related to the US and the UK affects the price of this pair. One of the events which affected most the volatility of the pound vs. dollar was Brexit.
Related pairs
EUR/USD
The EUR/USD (or Euro Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The popularity of Euro Dollar is due to the fact that it gathers two main economies: the European and American (from United States of America) ones. This is a widely traded currency pair where the Euro is the base currency and the US Dollar is the counter currency. Since the EUR/USD pair consists of more than half of all the trading volume worldwide in the Forex Market, it is almost impossible for a gap to appear, let alone a consequent breakaway gap in the opposite direction.
Normally, the EUR/USD is very quiet during the Asian session because economic data that affects the fundamentals of those currencies is released in either the European or U.S. session. Once traders in Europe get to their desks a flurry of activity hits the tape as they start filling customer orders and jockey for positions. At noon activity slows down as traders step out for lunch and then picks back up again as the U.S. comes online.
USD/JPY
The USD/JPY (or US Dollar Japanese Yen) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: EUR/USD, GBP/USD, AUD/USD, USD/CHF, NZD/USD and USD/CAD. Japanese Yen has a low interest rate and is normally used in carry trades. This is the reason why is one of the most trades currencies worldwide. In the USD/JPY the US Dollar is the base currency and the Japanese Yen is the counter currency. The pair represents American (from United States of America) and Japanese economies.
Trading the USD/JPY currency pair is also known as trading the "ninja" or the "gopher", although this last name is more frequently used when referred to the GBP/JPY currency pair. The US Dollar Japanese Yen usually has a positive correlation with the following two pairs: USD/CHF and USD/CAD. The nature of this correlation is due to the fact that both currency pairs also use the US Dollar as the base currency, such as USD/JPY. The value of the pair tends to be affected when the two main central banks of each country, the Bank of Japan (BoJ) and the Federal Reserve Bank (Fed), face serious interest rate differential.