GBP / USD jumps to 10-day highs above 1.3650 after NFP

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  • GBP / USD drew some falling buying on Friday amid a modest USD pullback following the NFP report.
  • The US economy added just 194,000 jobs in September; the unemployment rate fell below 5%.
  • High US bond yields helped limit the USD’s deeper losses and capped the pair higher.

The pair GBP/USD gained some positive traction in the last hour and soared to a 10-day high, above the 1.3655 zone in reaction to mixed US employment figures.

The pair drew some buying on dips near the 1.3580-85 region on the last day of the week and turned positive for the second day in a row. This also marked the sixth day of a rally in the previous seven and received an additional boost from a modest weakness in the US dollar during the early North American session.

The dollar witnessed some selling after the headline of the NFP report disappointed expectations by a large margin and showed that the economy created just 194,000 jobs in September. This was well below consensus estimates for an addition of 500,000, although it was partially offset by an upward revision from the previous month’s reading.

Additional details revealed that the unemployment rate fell below the 5.0% mark for the first time since the start of the pandemic in March 2020. However, the data did little to dampen expectations that the Fed will soon begin to reduce. your bond purchases and possibly raise interest rates in 2022.

This was reinforced by a rather subdued reaction in the money markets. In fact, the benchmark 10-year US government bond yield was flat near four-month highs, around 1.59%. This, in turn, continued to act as a tailwind for the dollar and kept any uncontrolled rallies for the GBP / USD in cap, at least for now.

Technical levels

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