07 June 2024, GBP/USD
An event to look out for today:
15:30 GMT+3. USD - Change in the number of employed in the non-agricultural sector
GBPUSD:
The GBP/USD pair traded in positive territory for the third consecutive day around 1.2785 in the early Asian session on Friday. In the absence of key UK economic data releases, the GBP/USD pair will be influenced by the US dollar. All eyes will be on the US Non-Farm Payrolls (NFP) data for May, due out later on Friday.
Traders raised bets that the US Federal Reserve (Fed) will cut interest rates later this year, which led to a decline in the US Dollar (USD) and bond yields. The US Dollar Index (DXY), which reflects the value of the dollar against a basket of foreign currencies, fell to 104.10 and 10-year US bonds fell to 4.285%. Markets estimate the probability of a Fed rate cut in September at about 68%, down from 55% earlier in the week, according to CME's FedWatch tool.
On Thursday, the U.S. Labor Department reported that initial jobless claims for the week ended May 31 rose 229,000 from the previous reading of 221,000, beating the market consensus forecast of 220,000. Investors will be focused on U.S. employment data for May.
NFP forecast that the US economy will add 185,000 new jobs in May and the unemployment rate will remain unchanged at 3.9% for the same period. Weaker-than-expected employment data may trigger speculation of a Fed rate cut, which will put pressure on the US dollar.
Trading recommendation: Trade predominantly with Buy orders from the current price level
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