The GBP/USD pair is trading lower at around 1.3010 during the early Asian session on Wednesday, despite some consolidation in the US Dollar (USD). Market participants are closely monitoring upcoming economic data, including the UK’s Autumn Budget, the US October ADP Employment Change, and the advanced US Q3 Gross Domestic Product (GDP), all scheduled for release later today.
According to the US Bureau of Labor Statistics (BLS), the latest Job Openings and Labor Turnover Survey (JOLTS) revealed that job openings fell to 7.443 million, down from the revised figure of 7.861 million in August and below the market expectation of 7.99 million. This data may contribute to dovish sentiment regarding Federal Reserve (Fed) policy, potentially putting downward pressure on the USD against the Pound Sterling (GBP).
A Reuters poll of 111 economists indicates that the Fed is likely to cut its key interest rate by 25 basis points (bps) on November 7, with over 90% anticipating a similar quarter-percentage-point reduction in December.
On the UK side, the Labour government is poised to deliver its first budget in nearly 15 years. Chancellor of the Exchequer Rachel Reeves is expected to announce £40 billion in tax hikes and spending cuts, targeting areas such as Employer National Insurance contributions, capital gains tax, and inheritance tax allowances.
Analysts at Commerzbank noted that if the budget balances austerity with initiatives aimed at boosting long-term investment, it could be positive for the Pound, enhancing the UK’s growth potential. Investors are awaiting further clarity on these developments, which could significantly influence market sentiment and currency valuations.
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