Ella 
GBP/USD continued its fourth straight day of gains in Asia on Monday, trading around 1.2550. The rise in GBP/USD may be due to the market recalibrating expectations for a rate cut by the Federal Reserve (FED) in 2024 following weak employment data from the United States.
U.S. nonfarm payrolls data released last Friday showed that the U.S. economy added 175,000 jobs in April, lower than the 243,000 expected. This indicates that U.S. economic growth has slowed sharply from the 315,000 new jobs created in March. . Additionally, average hourly earnings in April came in at an annual rate of 3.9%, slightly below expectations of 4.0% and the previous reading of 4.1%. Meanwhile, wage growth came in at 0.2% monthly, slightly below expectations of 0.3%.
The Fed is now expected to begin cutting interest rates in September, a change from November as previously expected. The odds of a 25 basis point rate cut by the Fed during its September meeting have risen to 48.8% from 43.8% a week ago, according to the CME FedWatch tool.
In the UK, the Bank of England (BOE) is expected to keep interest rates unchanged at 5.25% at its meeting on Thursday. Investors’ expectations for a rate cut from the Bank of England have been pushed back to September amid concerns that strong wage growth in the UK is fueling core inflation, the Bank of England’s preferred inflation measure.
In April, Bank of England Governor Andrew Bailey expressed optimism as UK inflation appeared on track to hit its 2% target. Inflation fell to 3.2% in March, the lowest level since September 2021.
