GBP/USD awaiting US non-farm employment data | 05 April 2024

Events to pay attention to today:

15:30 EET. USD - Nonfarm Payrolls

GBPUSD:

During the early Asian session on Friday, the GBP/USD pair traded with a slight negative bias around 1.2640. Investors will be closely monitoring the expected US non-farm payrolls data on Friday, following a

rise in initial jobless claims in the US to a two-month high last week. On Thursday, the Labour Department reported that the number of Americans filing new claims for unemployment benefits for the week ended March 30 increased by 9,000 to 221,000 from the previous week's 212,000. This was below the market consensus forecast of 214,000. Additionally, jobless claims decreased by 19,000 to 1.791 million in the week ended March 23. Following the release of weak economic data from the US, the dollar dropped below the 104.00 support level. However, the safe-haven dollar reduced losses as fears of an Iranian attack on Israel increased market uncertainty.

According to the Express newspaper, the CIA has warned Israel that Iran will attack within the next 48 hours. The warning came after Israel attacked Tehran's consulate in Damascus, Syria, killing two Iranian military leaders. Escalating geopolitical tensions in the Middle East could strengthen the US Dollar and pose a challenge for GBP/USD.

On the other hand, the Pound Sterling (GBP) will be affected by market forecasts for a Bank of England (BoE) rate cut. Investors anticipate that the UK central bank will reduce borrowing costs in June due to the country's consistently slowing inflation. In recent weeks, Bank of England Governor Andrew Bailey has stated that further positive signs of decreasing inflation have brought the UK economy closer to the point where the central bank could begin to cut interest rates.

Trading recommendation: Trade buy orders when the price reaches 1.2660.

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