The pound against the dollar gave up its gains since the non-agricultural upset! Reduction expectations have not yet cooled down

On Friday (October 8), affected by the mixed employment data in the United States, the pound against the dollar gained some positive traction in the past hour and hit a more than one-week high near 1.3655, but then almost gave up all the gains. .


On the last day of the week, GBP/USD attracted some low-point buying near the 1.3580-85 area and turned positive for the second day in a row. This is also the sixth trading day of the previous seven trading days, and it has gained additional boost from the mild weakness of the US dollar in the early trading in the North American market.

After the non-agricultural employment data was significantly lower than expected and showed that the United States only created 194,000 jobs in September, there was some sell-off in the US dollar. This number was far below the expected 500,000, but was partially offset by the upward revision of last month's data. More details show that the unemployment rate fell below 5.0% for the first time since the pandemic began in March 2020.

Institutional comments on US non-agricultural employment data: The number of new jobs in the United States in September has been lower than expected for the second consecutive month, indicating a weak recovery in the labor market, complicating the Fed’s decision to reduce monetary support before the end of the year. The sluggish employment growth for several months shows that there is a tug-of-war between employers and job-seekers-employers desperately need employees, and job-seekers are slow to return to the workplace. Nevertheless, as companies raise wages, the reopening of schools and the end of federal unemployment benefits should lead to an increase in hiring in the coming months.

However, these data have hardly weakened expectations that the Fed will soon begin to reduce bond purchases and may raise interest rates in 2022.

The exchange rate bears subsequently counterattacked, further strengthening this. In fact, the benchmark 10-year U.S. Treasury bond yield continues to stabilize at around 1.59%, which is close to a 4-month high. This, in turn, continued to boost the U.S. dollar and restrained any surge in the pound against the U.S. dollar.

On the upside, the resistance levels focus on 1.3655, 1.3717, and 1.3743, and on the downside, the support levels focus on 1.3574, 1.3544, and 1.3500.

(The British pound against the U.S. dollar daily chart)

At 21:42 GMT+8, the pound was quoted at 1.3629 against the US dollar.