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Old 08-09-2023, 10:49
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Default GBP/USD Recovers, Stays Below 1.2500

GBP/USD has seen a glimmer of hope after enduring three consecutive days of losses. In the Asian trading session on Friday, the currency pair made a modest recovery, hovering around the 1.2490 mark. This turnaround can be primarily attributed to a correction in the value of the US Dollar (USD), which had been enjoying an impressive winning streak for the past three days. The trigger for this correction can be traced back to a pullback in US Treasury yields. In particular, the 10-year US Treasury bond yields experienced a decline of 1.36%, resting at 4.22%, as compared to the previous day.

The recent US economic data has played a role in shaping the currency dynamics. On Thursday, the release of employment data revealed that Initial Jobless Claims had fallen to 216K on September 1st, a notable improvement from the previous figure of 229K. This exceeded expectations, as analysts had projected an increase to 234K. Additionally, in the second quarter (Q2), US Unit Labor Costs surged to 2.2%, a significant uptick from the previous 1.6%, contradicting earlier forecasts. These favorable economic indicators have been contributing to the strengthening of the US Dollar (USD).

The US Dollar Index (DXY), a gauge of the Greenback’s performance against six major currencies, is currently trading around the 104.90 mark. Although it remains below its highest level since April, which it reached on Thursday, the USD is displaying resilience.

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