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The GBP/USD pair posts modest gains to near 1.3125, snapping the three-day losing streak during the early Asian session on Friday. However, the upside for the major pair might be limited as traders brace for the highly-anticipated US Nonfarm Payrolls (NFP) data, which is due later on Friday.
Federal Reserve (Fed) Chair Jerome Powell said earlier this week that the recent half-percentage point interest rate cut shouldn’t be interpreted as a sign that future moves will be as aggressive. Powell further stated that if the economic data remains consistent, there are likely two more rate cuts coming this year, but they will be smaller. The reduced bets of jumbo Fed rate cuts might underpin the Greenback in the near term.
The encouraging US economic data on Thursday supports the USD. Data released by the Institute for Supply Management (ISM) showed that the US Services Purchasing Managers Index (PMI) rose to 54.9 in September versus 51.5 prior. This figure came in above the market consensus of 51.7.
The Pound Sterling (GBP) edged lower to the two-week lows on Thursday after Bank of England (BoE) Governor Andrew Bailey’s speech. Bailey noted that the UK central bank could take a more aggressive approach to lowering interest rates as inflation stayed subdued. The remarks from Bailey have triggered the expectation of a quarter-point cut in November and a solid chance of a consecutive reduction in December. More By This Author:WTI Drifts Higher Above $70.50 On Fears Over Middle East Supply Disruptions USD/CAD Drifts Higher To Near 1.3500 Amid Geopolitical Risks GBP/USD Trades With Mild Losses Below 1.3400 Ahead Of US PMI Data
