The British Pound strengthened by over 0.41% against the US Dollar on Friday, with GBP/USD trading at 1.3250 after rebounding from daily lows below 1.3200. This move followed the release of the US Nonfarm Payrolls (NFP) report for September, which showed the US economy added only 29,000 jobs, significantly missing estimates of 90,000. Additionally, the US Unemployment Rate rose from 4.1% to 4.2%, and August's payroll figures were revised downward from 162,000 to 133,000 [1].
The disappointing US employment data led money markets to increase their bets that the Federal Reserve will keep interest rates steady, with the probability of a rate hold in October rising to 79% and markets effectively pricing out an October rate hike, according to Prime Terminal [1]. US Treasury yields remained steady after the report, with the 10-year Treasury note yielding 5.256%, up nearly one and a half basis points, while the long end of the curve was unchanged [1].
In the UK, there were no major economic releases, but political commentary gained attention as Andy Burnham suggested the UK could consider rejoining the European Union, referencing his campaign to remain in the EU during the 2016 referendum [1]. Market expectations for the Bank of England (BoE) indicate roughly 30 basis points of monetary tightening by year-end and about 90 basis points by 2027 [1].
Looking ahead, the UK economic calendar will feature speeches by BoE's Mann and Lombardelli, while the US will see the release of the ISM Services PMI, FOMC meeting minutes, jobless claims, and the University of Michigan Consumer Sentiment survey next week [1]. Technical analysis shows GBP/USD trading at 1.3225 with a bearish near-term bias, as the pair remains below key moving averages and trend lines, though downside momentum may be slowing [1].
CONCLUSION
The British Pound's rebound was driven by weaker-than-expected US jobs data, which shifted market expectations toward a Federal Reserve rate hold in October. While the GBP/USD remains under technical pressure, the immediate market reaction favored Sterling as US rate hike bets diminished.