The British Pound (GBP) traded near its lowest level since June 26, remaining below the 1.3200 mark against the US Dollar (USD) during the Asian session on Friday, as the USD maintained a bullish tone ahead of the US Nonfarm Payrolls (NFP) report [1]. The GBP/USD pair appeared set to register modest losses for the third consecutive week, with traders awaiting the US monthly employment data for further direction regarding the Federal Reserve's future policy path [1]. The USD Index (DXY), which tracks the Greenback against a basket of currencies, stood firm near a one-and-a-half-year high, supported by oil-driven inflation concerns and persistent geopolitical uncertainties related to the US-Iran standoff, both of which benefited the safe-haven USD [1].
In the UK, 30-year gilt yields surpassed 6% for the first time since early 1998, raising fiscal concerns ahead of the Autumn Budget scheduled for October 28 [1]. This development added pressure on the British Pound, contributing to its recent weakness against the USD [1]. Technical analysis indicated that the GBP/USD pair maintained a bearish near-term outlook, with the break below 1.3200 opening the possibility of a retest of the year-to-date low around 1.3140, and potentially the 1.3100 level if further downside occurs [1]. Any recovery attempts were expected to face resistance ahead of the 1.3300 mark, with sustained gains above this level required to support a more bullish scenario, potentially targeting the 200-day Simple Moving Average at 1.3448 [1].
Market participants were seen exercising caution, refraining from aggressive directional bets ahead of the key US NFP data, which is anticipated to provide fresh impetus for both the USD and GBP/USD pair [1]. The overall sentiment remained cautious, with the GBP under pressure from both domestic fiscal concerns and external USD strength [1].
CONCLUSION
The British Pound remains under pressure near multi-week lows against the US Dollar, weighed down by rising UK gilt yields and a strong USD ahead of the US Nonfarm Payrolls report. Market participants are expected to remain cautious until the release of key US employment data, which could set the tone for future moves in the GBP/USD pair.