**GBP/USD Slips to 10-Week Low Despite JOLTS Miss and Fed Caution**
*Based on original reporting by Anil Panchal, FXStreet*
The British pound (GBP) struggled for footing against the US dollar (USD) on Tuesday, as the GBP/USD currency pair tumbled to a fresh 10-week low. A confluence of factors—including risk aversion, recent US data, evolving monetary policy expectations, and disappointing UK-specific developments—combined to put renewed selling pressure on sterling, overshadowing any relief from a weaker-than-expected US job openings report (JOLTS). Below, we examine the drivers behind sterling’s latest slide, review technical and fundamental signals, and analyze what traders can expect in the near term.
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**Key Takeaways**
– GBP/USD hits 10-week low, breaking below early May lows amid broad USD strength
– UK economic and political uncertainties weigh on the pound
– US JOLTS Job Openings report misses estimates, but dollar remains in demand
– Fed officials maintain cautious stance, fueling risk aversion
– Higher Treasury yields support the greenback
– Key support and resistance technical levels come into focus for GBP/USD
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### Market Overview: The Global Backdrop Boosts the Dollar
The dollar’s resurgence has been a dominant theme in global foreign exchange markets as of late. Growing risk aversion and a hawkish repricing of major central banks have combined to lift the greenback across the board. Sterling was not immune from these moves, succumbing to downside pressure as investors sought the relative safety and yield of the US dollar.
#### The Current Global Environment Features:
– Heightened geopolitical risk and uncertainty, including prolonged conflict in Ukraine and political developments in several major economies
– Volatile global bond markets, driving safe-haven flows into US Treasuries
– Persistent monetary policy divergence between the Federal Reserve, Bank of England (BoE), and other major central banks
– Data-dependent central bank guidance, fueling short-term trading swings in major currencies
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### US Dollar Stays in Favor, Even After Weak JOLTS
On Tuesday, the latest Job Openings and Labor Turnover Survey (JOLTS) from the US Labor Department showed job openings in June falling to 8.76 million, below both expectations and the prior month’s 8.9 million. Typically, a weaker JOLTS number signals cooling labor demand, often seen as a negative for the dollar.
**Despite the Miss, the Dollar Held Strong. Main Drivers Include:**
– Continued risk aversion: Global investors are wary, propping up the safe-haven USD
– Solid US economic fundamentals: Despite pockets of weakness, the US economy continues to outperform peers
– Higher Treasury yields: As bond yields surge, the dollar’s carry remains compelling
– FOMC caution: Fed officials, including Jerome Powell, have reaffirmed a ‘data-dependent’ approach, shying away from dovish pivots. Recent comments hint that rate cuts will not be rushed, maintaining policy at restrictive levels
**Fed Speaker Highlights:**
– Fed’s Michelle Bowman and Loretta Mester reiterated high inflation risks and a patient approach, dampening rate cut hopes
– Markets have dialed back expectations for quick, aggressive Fed easing, fueling USD resilience
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### UK-Specific Headwinds Pressure Sterling
The British pound finds itself underwhelming on several fronts as growth and inflation signals out of the UK remain mixed, and political uncertainty continues to loom.
**Key Negative Factors for GBP:**
– Subdued UK economic data: Growth remains modest, while inflation is falling, dampening the case for further BoE rate hikes
– Diminished rate hike expectations: Markets see UK rates peaking or have peaked, lowering sterling’s yield allure
– Political risk: With a general election on the horizon and post-Brexit frictions unresolved, uncertainty persists across UK assets
– Weak manufacturing and construction
Read more on GBP/USD trading.