The GBP/USD pair is currently exhibiting a stable performance, hovering around 1.3465 in the early hours of European trading on Thursday. Markets exhibit a cautious stance as traders anticipate the release of significant US economic data this week. The weekly US Initial Jobless Claims report is set to be released later today, preceding the much-anticipated Nonfarm Payrolls data. GBP/USD remains stable around 1.3465 during the early European session on Thursday. Market participants are choosing to remain cautious as they await the crucial US employment figures set to be released on Friday. A careful perspective regarding the BoE policy outlook may bolster the Pound Sterling.
Attention will be focused on the US jobs data for December this Friday, as it could provide insights into the trajectory of interest rates. The US NFP is projected to increase by 60,000 in December. Meanwhile, the Unemployment Rate is projected to decrease to 4.5% in December, down from 4.6% in November. If the reports indicate stronger-than-anticipated results, this could impact expectations for additional easing by the US Federal Reserve, potentially strengthening the Greenback relative to the Pound Sterling.
Nonetheless, a dovish stance from the Fed officials may weaken the USD and provide support for the major pair. Fed Governor Stephen Miran, whose term at the US central bank concludes later this month, stated on Tuesday that substantial US interest rate reductions are essential this year to maintain economic momentum. Furthermore, Minneapolis Fed President Neel Kashkari indicated that he perceives a risk of the jobless rate potentially “popping” higher.
The Bank of England is anticipated to adopt a gradual approach to monetary easing in 2026, given that inflation remains significantly above the central bank’s 2% target. This may subsequently offer some backing to the Cable. The outlook for the UK central bank indicates that financial markets anticipate at least one rate reduction in the first half of the year, with nearly a 50% probability of a second cut by year-end, as reported.