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GBP/USD under pressure ahead of U.S Non-Farm Payroll data

Fri, May 06 2016, 06:23 GMT SzrnFX

The GBP/USD wiped-out gains and now gradually drifts lower, as the US dollar remains solid against its major peers before the US labour market report, as recent hawkish comments from Fed officials lends support the upside bias in the greenback.

Overnight, the dollar rose against a basket of currencies for a third day on Thursday as traders closed out profitable bets against the greenback before Friday’s U.S. payrolls report which may confirm the view the Federal Reserve will not raise interest rates soon.

Moreover, a series of recent sluggish UK fundamentals combined with risk-off tone in the markets further add to the bearish pressure surrounding GBP/USD. While from a wider perspective, uncertainty over EU referendum also keeps the pound broadly undermined.

The FOMC’s next meeting on June 14-15 will come days before a controversial referendum in the U.K. on its status in the European Union. A vote paving the way for a so-called “Brexit,” could have broad implications on global financial and foreign exchange markets. Earlier this week, Lockhart outlined the risk of Britain’s departure from the EU at a closely-watched speech in Amelia Island, Florida.

Amid a data-empty UK docket, next on tap remains the US NFP data, which will have major impact on the US dollar and will also shape up Fed next decision on the interest rates.


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