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FOREX: GBP Recovers as Pill Retains Cautious Approach to BoE Rate Cuts

FOREX
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  • JPY is the strongest performing currency in G10, pressuring AUD/JPY back toward Y100.00 to fade the Ishiba-triggered move mid-week. As a result, yesterday's USD/JPY high at 147.24 remains intact, allowing the USD/JPY strength to press pause.
  • GBP trades well, partially reversing the Bailey-inspired sell-off on Thursday. BoE's Pill added to the recent BoE policy mix, tilting hawkish in his view that the Bank should be cautious and avoid cutting rates "too far or too fast".  As a result, GBP/USD is back above 1.3150, facing next intraday resistance at 1.3174, the 38.2% retracement for the downleg posted off the midweek high.
  • NZD is at the bottom of the G10 pile, just underperforming against the EUR.
  • Focus for the duration of Friday trade turns to the US jobs report, at which markets expect the US to have added 150k jobs over the month, keeping the unemployment unchanged at 4.2%. Nonetheless, there remain upside risks to unemployment - which could further trigger a dovish response via pricing for a 50bps November Fed rate cut.
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  • JPY is the strongest performing currency in G10, pressuring AUD/JPY back toward Y100.00 to fade the Ishiba-triggered move mid-week. As a result, yesterday's USD/JPY high at 147.24 remains intact, allowing the USD/JPY strength to press pause.
  • GBP trades well, partially reversing the Bailey-inspired sell-off on Thursday. BoE's Pill added to the recent BoE policy mix, tilting hawkish in his view that the Bank should be cautious and avoid cutting rates "too far or too fast".  As a result, GBP/USD is back above 1.3150, facing next intraday resistance at 1.3174, the 38.2% retracement for the downleg posted off the midweek high.
  • NZD is at the bottom of the G10 pile, just underperforming against the EUR.
  • Focus for the duration of Friday trade turns to the US jobs report, at which markets expect the US to have added 150k jobs over the month, keeping the unemployment unchanged at 4.2%. Nonetheless, there remain upside risks to unemployment - which could further trigger a dovish response via pricing for a 50bps November Fed rate cut.