Neutral
GBP/USD stabilizes near $1.3220 as weak US jobs data dampens Fed rate hike expectations.
The GBP/USD exchange rate remained relatively stable around $1.3220, as weaker-than-expected US employment data reduced the likelihood of an immediate Federal Reserve interest rate hike. This development offset the upward pressure from elevated UK gilt yields, leading to a balanced market sentiment.
Key points
- US Nonfarm Payrolls for September increased by only 29,000, significantly below the anticipated 90,000, leading to a 77.9% probability that the Federal Reserve will maintain current interest rates in October.
- The Bank of England is considering a rate hike to 4.00% on November 5, with markets assigning an 88% chance, as three policymakers voted to raise rates in September.
- UK 10-year gilt yields reached 5.39%, close to the 5.51% peak of October 1, the highest since July 2007, indicating persistent inflation concerns.
- The US Dollar Index hit a fresh annual high near 102.53, but the GBP/USD pair recovered slightly as the US Dollar Index retreated.
Sources
- GBP Weakens as Traders Reassess Fed and BoE Rate PathsTradingPedia · October 5, 2026
- Pound Sterling at 1.3228 Pinned Near a 3-Month Low as the Dollar Index Hits 102.53TradingNews · October 5, 2026
- British Pound Recovers Some Losses Against US Dollar, ISM Services PMI EyedTMGM · October 5, 2026
- Sterling Steadies After Weak U.S. Payrolls Offset Pressure from Elevated U.K. Gilt YieldsFXMare · October 5, 2026
AI-generated from public news sources. Not financial advice.
