GBP/USD climbs to two-week highs above 1.3830 on renewed USD weakness
- GBP/USD gained traction during the American trading hours.
- US Dollar Index slumped to multi-week lows below 92.30.
- Focus shifts to August jobs report from US.
After spending the majority of the day in a tight range below 1.3800, the GBP/USD pair turned north during the American trading hours and reached its strongest level since August 16 at 1.3834. As of writing, the pair was up 0.45% on the day at 1.3830.
DXY extends slide on Wall Street rally
The unabated selling pressure surrounding the greenback seems to be fueling the pair's rally in the second half of the day. With Wall Street's main indexes pushing higher after the opening bell, the improving market mood made it difficult for the USD to stay resilient against its rivals. The US Dollar Index was last seen trading at its lowest level in four weeks at 92.26, losing 0.25%.
Earlier in the day, the data from the US revealed that the Initial Jobless Claims declined to 340,000 in the week ending August 28 from 354,000. Additionally, Challenger Jobs Cuts posted its lowest reading since 1997 at 15,723 in August.
On Friday, the US Bureau of Labor Statistics will release the Nonfarm Payrolls report for August.
Previewing this data, "August's NFP is critical due to the open question of Fed tapering," noted FXStreet analyst Yohay Elam. "Real estimates are considerably low due to weak leading indicators, and the dollar has already paid the price. A "not that bad" report could trigger a substantial greenback comeback."
Technical levels to watch for