The British Pound (GBP) dropped below the key support level of 1.3100 against the U.S. Dollar (USD) during Friday’s New York session, marking its fourth consecutive session of losses. The GBP/USD pair continues to slide as expectations for the Federal Reserve (Fed) to cut interest rates by 50 basis points have diminished following the release of a strong U.S. Nonfarm Payrolls (NFP) report for September.
According to the CME FedWatch tool, the likelihood of the Fed making additional rate cuts totaling 75 basis points by the end of the year has nearly disappeared after the positive NFP data.
The official Employment report revealed robust job growth in September, with 254,000 jobs added, far surpassing the forecast of 140,000 and the previous revised figure of 159,000, up from an initial 142,000. The Unemployment Rate also fell to 4.1%, compared to expectations and the previous figure of 4.2%.
Additionally, wage growth, as measured by Average Hourly Earnings—a key indicator of inflation tied to consumer spending—rose by 4% year-over-year in September, exceeding the estimated 3.8% and the prior reading of 3.9%. On a monthly basis, Average Hourly Earnings increased by 0.4%, outpacing expectations.
