Pound Rebounds as Dollar Fails to Hold Gains Following Strong Jobs Report
The Pound to Dollar (GBP/USD) exchange rate has found support below 1.3500, rising to around 1.3535 after Friday's stronger US jobs report failed to hold gains for the dollar.
Friday's jobs data showed a reported increase in non-farm payrolls of 162,000 for August, compared with consensus forecasts of around 55,000. The unemployment rate held at 4.1%, and markets are now pricing in around a 60% chance of a rate hike this month.
The next major catalyst for the pair is Friday's US inflation data, which could tip the balance on whether the Federal Reserve raises rates this month. Consensus forecasts are for the headline inflation rate to hold at 3.4%, with core prices expected to increase 0.2% on the month.
According to MUFG, 'the last week's latest developments including the nonfarm payrolls report for August and dovish comments from Fed Vice Chair Williams and Fed Governor Waller leave the prospect of a Fed hike this month finely balanced'.