- GBP/USD remains under selling pressure around 1.3625 in Thursday’s Asian session.
- Rising market anxieties over the UK’s debt position drag the Pound Sterling lower.
- The US employment data for June will take center stage later on Thursday.
The GBP/USD pair extends the decline to near 1.3625 during the Asian trading hours on Thursday. The Pound Sterling (GBP) faces some selling pressure amid a selloff in British government bonds. Traders will closely watch the US June employment data later on Thursday, including Nonfarm Payrolls (NFP), Unemployment Rate and Average Hourly Earnings.
The British bonds had their biggest selloff since October 2022, after the UK government decided to cut benefits and concerns arose over the finance minister’s future. Rising market anxieties over the UK’s debt position could exert some selling pressure on the Cable in the near term.
“It’s not just the British pound that is sharply lower, but the gilts are under a lot of pressure as well. I think it’s just a crisis of confidence in the Labour government,” said Marc Chandler, chief market strategist at Bannockburn Global Forex LLC.
On the USD’s front, the ADP National Employment Report showed on Wednesday that US private payrolls fell for the first time in more than two years in June, suggesting the Federal Reserve (Fed) might cut rates as soon as September. Traders will take more cues from the US employment data for June.
The US economy is expected to add 110,000 jobs in June, while the Unemployment Rate is expected to tick higher to 4.3% in the same period. If the reports show a weaker-than-expected outcome, this could weigh on the US Dollar (USD) and create a tailwind for the major pair.
