The GBP/USD currency pair settled below recent high of 1.3616, its strongest level since February 23rd 2022, as US job market resilience tempered Fed rate cut expectations.
Employers in the United States added 139,000 jobs in May, representing a slight pullback from April’s downwardly revised growth of 147,000 positions. The latest figure came in ahead of the 130,000 job increase forecast by economists surveyed by Reuters, but still signaled a cooling in hiring activity.
The US unemployment rate remained flat at 4.2%. This aligned with economists’ expectations and suggested a still-resilient labor market.
The jobs data prompted traders to scale back expectations for aggressive monetary easing. Market pricing now suggests that the Federal Reserve is unlikely to take action on interest rates before September.
In the meantime, the Pound has drawn support from media reports that UK exporters had received a temporary reprieve from sharp tariff hikes. UK steel and aluminum manufacturers will not be affected by the Trump administration’s recent tariff hike to 50%. Instead, they will only be subject to the already existing 25% duty.
Further aiding the Sterling, the UK’s Composite Purchasing Managers’ Index rose to 50.3 last month, higher than the estimated 49.4.
The GBP/USD currency pair settled 0.32% lower at 1.3524 on Friday.
The major Forex pair gained 0.59% for the week.
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