Sterling Extends Losses as NFP Data Gap Weighs on GBP/USD Outlook

2025-12-24 14:34:01

Sterling faced another bout of selling pressure on Wednesday, with GBP/USD sliding approximately 0.67% to touch the 1.3060 level. The downward momentum marks the fourth consecutive session of declines for the currency pair, extending what has become a challenging period for Cable traders.

UK inflation figures released midweek offered limited support to the Pound, failing to reverse the negative sentiment that has gripped recent trading sessions. Instead, market participants positioned for further weakness, driving GBP/USD into territory not seen in several weeks.

NFP in Forex Markets Under the Microscope

The landscape for currency traders faces a significant complication this week. The US Bureau of Labor Statistics has suspended the October Nonfarm Payrolls release due to data collection disruptions from the federal government shutdown. This absence of employment data leaves forex markets without a key economic barometer that typically influences USD positioning and cross-currency flows.

Thursday’s scheduled publication of September’s NFP report will proceed as planned, though its market impact remains questionable. With October’s employment figures now postponed, policymakers face an extended information drought stretching into year-end, potentially limiting the Fed’s ability to make fully informed decisions on monetary policy through the final quarter.

Rate Cut Expectations Shift Lower

Financial markets have recalibrated their expectations for Federal Reserve action. According to the CME FedWatch Tool, probability estimates for a December 10 rate cut have compressed to approximately 30%, reflecting reduced conviction among traders that relief is imminent. This repricing reflects broader uncertainty about economic conditions and the Fed’s policy trajectory amid the data void created by the delayed NFP release.

For GBP/USD participants, this shift in US monetary policy expectations compounds challenges for Sterling recovery, as rate differential dynamics become less supportive for the currency pair in the near term.

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