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Pound Sterling holds gains against US Dollar as traders raise Fed interest rate cut bets
Monday, 4 August 2025 15:42 WIB | GBP/USD |Poundsterling

The Pound Sterling (GBP) holds onto Friday's gains around 1.3300 against the US Dollar (USD) during the European trading session on Monday. The GBP/USD pair shows strength as the US Dollar (USD) licks its wounds following the sharp decline registered on Friday after the release of the United States (US) Nonfarm Payrolls (NFP) data for July.

At the time of writing, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, trades close to Friday's low of around 98.60.

The US NFP report showed that labor market conditions have cooled down significantly. According to the report, the economy created fresh 73K jobs, significantly lower than expectations of 110K. Also, employment figures for June and May were revised down sharply. The Unemployment Rate accelerated to 4.2%, as expected, from the previous 4.1%.

Cooling labor market conditions have paved the way for interest rate cuts by the Federal Reserve (Fed) in the September policy meeting. According to the CME FedWatch tool, the probability of the Fed to cut interest rates next month has increased to 80.8% from the 41.2% seen on Thursday, a day before the release of the NFP data.

Meanwhile, the sudden resignation of Fed Governor Adriana Kugler has also increased hopes that the Fed could resume its monetary-easing cycle from September. Market experts believe that decisions from the new Governor appointed by US President Trump to replace Kugler will be biased towards his economic agenda.

"Kugler's resignation allows the president to further shape the FOMC (Federal Open Market Committee) in his own image," analysts at Harris Financial Group said, Reuters reports.

Source: FXstreet

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