On Friday, the GBP/USD pair sold near 1.2055, which erased most of the gain from the day before. Early in the European session, intraday losses picked up, sending spot prices to a new daily low near 1.1900.

The British pound went up Thursday after Boris Johnson said he would step down as prime minister. The market didn’t react long because Johnson’s resignation might price in UK currency. Other problems within the country hurt the sterling, which, along with people buying US dollars, pushed the GBP/USD pair down.

As investors wait for the June Nonfarm Payrolls data, the US Dollar Index goes above 106,000. In the afternoon, the BLS will release the June Nonfarm Payrolls report. In May, people in the market will also pay close attention to the Labor Force Participation Rate and wage inflation numbers.

The Fed hopes that if there are more jobs, wage inflation will go down. If the jobs report shows this hasn’t happened, the dollar may have a good weekend. Positive feelings in the market could stop the dollar from rising and help the GBP/USD pair recover.

Conclusion

Investors are worried that the Northern Ireland Protocol Bill could start a trade war with the EU over the cost of living issue. Fears of a recession make it likely that the Bank of England will slowly raise interest rates, making the GBP even weaker.