FX.co ★ GBP/USD
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GBP/USD
The British pound (GBP) weakened against the US dollar (USD) on Friday after initially bouncing back in early trading in New York. This reversal came after the release of key economic data from the United States. The US non-farm payrolls report for April revealed weaker than expected job growth and slower wage increases. This data initially caused the dollar to lose ground. However, the dollar rebounded after another report, the ISM's US Services Purchasing Managers' Index (PMI), showed a surprising rise in services prices. This suggests that inflationary pressures are intensifying in the US economy, which could discourage the Federal Reserve (Fed) from cutting interest rates as anticipated. Prior expectations were for the Fed to cut rates in September, but this data has cast doubt on those plans. The disappointing jobs data showed that non-farm employers added only 175,000 jobs in April, significantly lower than the expected 243,000. The unemployment rate also rose slightly to 3.9%. Average hourly earnings, a key indicator of inflation, grew at a slower pace than expected at 3.9% year-on-year. This is down from 4.0% previously and short of the anticipated 4.1% increase. Month-on-month growth also slowed to 0.2%, falling below the expected 0.3%.
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