- GBP/USD attracts some buyers above the 1.2600 mark in the early European session.
- US Nonfarm Payrolls (NFP) for August came in better the expected; Manufacturing PMI rose to 47.6 vs. 46.4 prior.
- UK S&P Global/CIPS Manufacturing PMI came in at 43.0 In August from 45.3 in July.
- Investors await the US ISM Services PMI for August for fresh impetus.
The GBP/USD pair recovers some recent losses and holds above the 1.2600 mark during the early European session on Monday. The major pair currently trades around 1.2612, gaining 0.17% on the day.
Markets remain subdued due to the Labor Day holiday in the US after a busy week of economic data released. The US Bureau of Labor Statistics revealed on Friday that the US Nonfarm Payrolls (NFP) for August came in at 187K, beating the expectations of 170K and 157K in the previous reading. The Unemployment Rate dropped significantly to 3.8%, compared to the market consensus of 3.5% and 3.5% prior. The monthly Average Hourly Earnings rose by 0.2%, against the estimation of 0.3%. Finally, the US Manufacturing PMI came in at 47.6 versus 46.4 prior and better than 47.0 expected.
Market participants speculate that the Federal Reserve (Fed) might end its cycle of monetary tightening. According to the CME FedWatch tool, the markets have priced in the fact that the Fed will not raise interest rates at its September meeting, and the probability of raising rates in November and December dropped to nearly 35%. Despite posting the lowest weekly gain since the beginning of July, the US Dollar (USD) trades in positive territory for the sixth consecutive week.
On the Pound Sterling front, the data released on Friday indicated that August was the weakest month for British factories since the beginning of the COVID-19 crisis, with orders plunging substantially due to rising interest rates. The S&P Global/CIPS Manufacturing PMI came in at 43.0 In August from 45.3 in July. The figure marked the six consecutive months below the 50 threshold. However, traders anticipate the odds of a 25 basis points (bps) rate hike in the upcoming meeting.
The BoE Chief Economist Huw Pill noted last week that inflation in the United Kingdom remains too high and added that there are several measures in the pipeline. The aggressive tightening of monetary policy by the BoE exerts some pressure on the British Pound considering investors fear the negative impact on the UK economy.
In the absence of the top-tier economic data release from the UK docket and the US holiday, investors will digest last week’s data ahead of the US ISM Services PMI for August. The figure is expected to rise to 52.6. Investors will take cues from the data and find opportunities around the GBP/USD pair.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD holds gains near 0.6600 as RBA Governor Bullock speaks
AUD/USD clings to gains near 0.6600 early Tuesday. The Aussie fails to find any inspiration, as the RBA holds the key interest rate at 4.35%. Strong China's Caixin Services PMI data supports the Aussie amid a steady US Dollar and a tepid risk tone. RBA Governor Bullock's presser gets underway.
USD/JPY: Rebound remains capped below 152.50 amid cautious mood
USD/JPY consolidates the bounce below 152.50 in Asian trading on Tuesday, tracking the US Dollar price action. The pair's upside remains capped by strong Japanese PMI data and a cautious market mood. Traders remain wary as Americans head to polls this Tuesday.
Gold traders appear non-committal on the US election day
Gold price is miring in five-day lows near $2,730 in Asian trading on Tuesday, lacking a clear direction. Traders remain wary and refrain from placing fresh bets on Gold price on the US presidential election day.
Trump-inspired memecoin MAGA shows bullish on-chain metrics ahead of US elections
MAGA trades slightly down to around $3.4 on Tuesday after rallying more than 20% since Sunday. The former President Donald Trump-based memecoin is poised for further gains as daily active addresses and network growth metrics rise, signaling increased network usage and adoption.
US presidential election outcome: What could it mean for the US Dollar? Premium
The US Dollar has regained lost momentum against its six major rivals at the beginning of the final quarter of 2024, as tensions mount ahead of the highly anticipated United States Presidential election due on November 5.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.