GBP Stands Firm Against USD as Rate Hike Expectations Plummet

The pound sterling (GBP) held its ground against the US dollar (USD) in Asian trading on Monday, despite some pullback from a three-week high above $1.3500 reached on Friday.

This stability is attributed to diminished expectations for further Federal Reserve rate hikes following weak US labor market data.

The July nonfarm payrolls report showed a decline of 23,000 jobs, significantly below market expectations, while June's job gains were revised down sharply from 57,000 to just 20,000.

As a result, market expectations for near-term Fed policy tightening have decreased, with less than a 45% probability of a rate hike in September, compared to approximately 67% seen a week earlier.