The pound advanced toward $1.34, its highest level in two weeks, as the US dollar weakened following a sharply softer-than-expected US jobs report and improving risk sentiment amid signs of progress in indirect US-Iran negotiations. The US economy added only 57,000 jobs last month, far below forecasts, while the unemployment rate fell to 4.2% as many individuals left the labor force.
In geopolitical developments, Qatar said the next round of US-Iran talks would be scheduled as soon as possible. Meanwhile, oil prices extended their decline as shipping through the Strait of Hormuz proceeded without major disruption.
On the monetary policy front, Bank of England Governor Andrew Bailey struck a dovish tone at the ECB’s Sintra Forum, pointing to evidence of a slowing UK economy but stressing that persistent inflation risks preclude imminent interest rate cuts. At the same time, Federal Reserve Chair Kevin Warsh noted that inflation expectations had eased in recent weeks, while reiterating the Fed’s commitment to returning inflation to its target.
