• US job creation beats expectations in April, with 115K new jobs added versus 62K expected.
• The US Dollar weakens despite solid employment data, as markets focus on easing geopolitical tensions.
• Pound Sterling remains supported despite Labour Party losses in UK local elections.

GBP/USD advances around 1.3630 on Friday at the time of writing, up 0.54% on the day, benefiting from broad US Dollar weakness following the release of the US employment report.

The Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls (NFP) increased by 115K in April, well above market expectations of 62K. March’s figure was also revised higher to 185K from the previously reported 178K. Meanwhile, the Unemployment Rate remained steady at 4.3%, in line with forecasts.

Annual Average Hourly Earnings growth came in at 3.6%, below the 3.8% expected, easing inflation concerns and supporting expectations that the Federal Reserve (Fed) could still move toward monetary easing in the coming months.

Investors are also favoring risk-sensitive assets amid persistent optimism surrounding discussions between the United States (US) and Iran, despite reports that the US military carried out airstrikes targeting several tankers near the Strait of Hormuz. As a result, the US Dollar Index (DXY) falls toward 97.90 despite the resilience of the US labor market.

On the UK side, the Pound Sterling (GBP) remains relatively stable despite the first results from local elections in the United Kingdom (UK). Prime Minister Keir Starmer’s Labour Party has lost control of several local councils, while Nigel Farage’s Reform UK continues to make strong gains. Nevertheless, Starmer stated on Friday that he is not considering resignation.

Comments from the Bank of England (BoE) are also providing support to the British currency. Governor Andrew Bailey warned that the central bank could act “forcefully” if Middle East tensions continue to drive energy prices and inflationary pressures higher. The BoE kept its policy rate unchanged at 3.75% at its latest meeting while leaving the door open to further tightening if needed.