GBP/USD Rebound Fails to Sustain Momentum After Strong US Payrolls
GBP/USD rebounded from an initial decline on Friday after stronger-than-expected US employment data briefly boosted the US Dollar (USD). The pair dropped to an intraday low of 1.3482 following the release before regaining ground, trading around 1.3512 at the time of writing.
The August Nonfarm Payrolls (NFP) increased by 162,000 in August, nearly three times the market expectation of 56,000. The July figure was also revised significantly higher, showing a 21,000 job increase compared with the previously reported 23,000 decline. Meanwhile, the US unemployment rate remained unchanged at 4.1%, matching expectations.
The limited downside reaction in GBP/USD suggests investors remain cautious about assuming that the strong payrolls figure alone will guarantee a Federal Reserve (Fed) rate increase this month. Policymakers continue to emphasize the importance of bringing inflation back toward the 2% target, making next week's Consumer Price Index (CPI) and Producer Price Index (PPI) reports particularly important for the September policy decision.