Pound near two-week low as US jobs lift dollar
The British pound weakened toward $1.35 on Friday near a two-week low as US nonfarm payrolls rose by 162,000 in August versus a 56,000 expectation, boosting the dollar and tightening Fed-rate expectations.
The British pound weakened toward $1.35 on Friday, hovering near a two-week low, as stronger-than-expected US employment data boosted the dollar and reinforced expectations for tighter Federal Reserve policy.
US nonfarm payrolls rose by 162,000 in August, well above expectations for a 56,000 gain, prompting markets to price in a near 58% probability of a Fed rate hike this month.
In the UK, markets are now fully pricing in a BoE rate hike by year-end, with another increase expected by March 2027.
Bank of England Chief Economist Huw Pill said on Thursday that raising interest rates now could reduce the risk of the central bank having to tighten policy more aggressively later to contain inflation.
For the September meeting, however, policymakers are widely expected to leave rates unchanged as they adopt a wait-and-see approach, assessing the trajectory of the conflict in the Middle East and its impact on energy prices and inflation.