Gbpusd Weak As Usd Recovers

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Gbpusd Weak As Usd Recovers

Gbp/Usd Weak Near 1.2800 As Usd Recovers

The GBP/USD is trading near the 1.2805, only a few pips away from the 1.2800 support level. The GBP/USD has snapped its 7-day winning streak and is now trading on a softer note as Monday's session unfolds.

The GBP/USD is showing weakness in the accounts, and the greenback is in the process of staging a modest recovery. However, experts believe that the downside in the GBP/USD will be limited as the chances of a September rate cut by the US Federal Reserve are very high.

Nfp Report Hints At Softer Inflation

Last Friday's Nonfarm payrolls (NFP) report was a major setback for the greenback. The reading was pretty strong, but it was still lower than May's print, and the unemployment rate has also gone up a notch. All of these point to a single thing - The labor market is not as strong as it was in the past, and that will drive inflation lower.

In fact, the recent NFP report was the first time ever that the jobless rate has gone up since December 2021. According to experts, the Federal Reserve will take steps including cutting the policy rate to support the labor market.

Meanwhile, the GBP (Pound Sterling) is in a strong position after the Labor Party's victory in the UK elections. As the Labor party has won a majority, it will serve as a basis of stability for the financial markets and the GBP.

In the USA, the elections are still a few months away, which means the uncertainty will continue to cloud the USD. Similarly, the inflation is now slowing down which is a good thing for the US consumers.

At the same time, it also means that the time to cut rates has finally arrived which is not that much of a good news for the US Dollar. Over all, the GBP/USD is expected to turn higher towards 1.2840, 1.2850, and then a.1865 as the trading week unfolds.

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