Sterling couldn't catch a bid into the data. GBP/USD hovered just above 1.3200 on Friday, unable to move far from Thursday's four-week low of 1.3180, and the pair was on course for a fifth consecutive weekly decline. The driver wasn't UK-specific — it was the relentless rout in global bonds, which crushed risk appetite and funneled money into the safe-haven dollar.
All eyes were on Friday's US Nonfarm Payrolls. Consensus saw September job gains of 90,000 with unemployment steady at 4.1%. The actual 29,000 print blew those expectations apart — and with it, much of the market's belief that the Fed isn't done hiking. Before the release, Lorie Logan of the Dallas Fed had said Friday rates need to rise at least another 50 basis points to tame inflation, while Neel Kashkari repeated his call for one more hike before year-end. That hawkish chorus now sounds dated.
Why it mattered
Cable was caught in a policy vice. The dollar drew strength from rising US yields and hawkish Fed rhetoric, while the pound was weighed down by soft domestic data — the UK manufacturing PMI was just revised lower, with output growth at its weakest in six months. Even hints from Bank of England Governor Bailey about higher rates ahead couldn't lift sterling. When both central banks sounded hawkish but only one currency benefited, it told you where the momentum was. The NFP miss has since scrambled that picture.
Related reading: September NFP shocks at 29K vs 90K expected and more Forex news.
What to watch next
- October Fed pricing: the 29K miss gutted hike bets — watch whether FOMC speakers try to rebuild them.
- Global bond yields: any stabilization in the rout would further ease dollar strength.
- 1.33 resistance: the relief bounce faces its first test there; a break opens room toward 1.34.
MarketRadar take
The dollar's trend has been dented, not necessarily broken — but the burden of proof has flipped to the bulls. Sterling finally has a catalyst for relief, though rallies still face the overhang of weak UK data. Near-term, the path of least resistance is a continued squeeze higher while hike pricing stays buried.
