GBP/USD Set to Retest YTD Low Amid Hawkish Fed Expectations
The British Pound (GBP) is trading 0.1% higher at around $1.3208 against the US Dollar (USD) during the Asian trading session on Friday.
The US Dollar Index trades slightly lower to near 101.93 after posting a fresh over-a-year high at 102.20 on Thursday, driven by surging United States Treasury Yields due to elevated energy prices and boosted hawkish Fed expectations.
Analysts at OCBC point out that recent jobless claims data have continued to trend lower, suggesting labour market conditions remain firm, and therefore the risk of an upside payrolls surprise appears to be increasing.
A stronger-than-expected employment report would likely reinforce expectations of further Fed tightening, keep Treasury yields elevated, and provide additional support for the USD.