Soft US Jobs May Push Pound Higher Despite Bailey Caution
The Pound to Dollar exchange rate saw a limited recovery on Thursday after touching its lowest level in 20 days. Despite this, market analysts believe that if US non-farm payrolls disappoint, the GBP/USD could extend its upward trend.
At the time of writing, the GBP/USD was trading at $1.3496, up marginally on the day and by 0.34% over the past 24 hours. The Euro to Dollar exchange rate also rose by 0.40%, while the Dollar to Yen decreased by 1.95%.
The Pound traded without a clear direction on Thursday as markets digested the UK's final services PMI, which showed growth in the vital sector reaching a four-month high in August. However, the revised reading was slightly lower than initially estimated, limiting Sterling's ability to make gains.
GBP investors were also unsettled by the recent surge in UK government borrowing costs, with gilt yields hitting a 19-year high on Wednesday and remaining sharply up on the week. On the other hand, the US Dollar trended lower as risk-on market sentiment improved, with government bond yields around the world declining and concerns about higher borrowing costs easing.