Sterling Faces Continued Pressure as NFP Uncertainty Clouds Market Outlook

GBP/USD declined approximately 0.67% on Wednesday, slipping toward the 1.3060 level as investors absorbed mixed economic signals. The bearish momentum extended into a fourth consecutive losing session, signaling sustained weakness in Cable demand despite anticipated relief from UK inflation data.

UK CPI inflation figures disappointed expectations, failing to provide the catalyst needed to reverse Pound Sterling’s downward trajectory. Rather than sparking renewed buying interest, the data release only accelerated selling pressure, pushing Sterling into multi-week lows as traders repositioned ahead of crucial US employment releases.

The employment calendar has thrown a wrench into Fed policy expectations. The US Bureau of Labor Statistics canceled October’s Nonfarm Payrolls report due to the federal government shutdown, leaving markets short on crucial labor market insights. With September’s NFP data scheduled for Thursday release, investors face an extended information gap that could persist through year-end policymaking decisions.

Rate markets are already adjusting to the uncertainty. According to CME FedWatch data, Federal Reserve interest rate cut odds for December 10 have compressed to approximately 30%, reflecting reduced confidence in near-term monetary accommodation. The NFP gap means policymakers will operate with limited employment readings heading into the new year, creating additional headwinds for Sterling as traders grapple with an unusually opaque economic backdrop.