GBP/USD softens to near 1.3000 ahead of UK Autumn Budget

• GBP/USD edges lower to near 1.3010 in Wednesday’s early Asian session.
• Job openings fell more than expected in September. 
• Traders brace for the UK’s Autumn Budget, advanced US Q3 GDP data, which will be released on Wednesday.

The GBP/USD pair weakens around 1.3010 despite the consolidation of the US Dollar (USD) during the early Asian session on Wednesday. Investors await the release of the UK’s Autumn Budget, the US October ADP Employment Change for October and the advanced US Q3 Gross Domestic Product (GDP), which are due later on Wednesday.

The US Bureau of Labor Statistics (BLS) reported in the Job Openings and Labor Turnover Survey (JOLTS) on Tuesday that Job openings came in at 7.443 million, followed the 7.861 million (revised from 8.04 million) seen in August, and came in below the market expectation of 7.99 million. This report might prompt the Federal Reserve (Fed) dovish bets and weigh the Greenback against the Pound Sterling (GBP). 

The Fed is likely to cut its key interest rate by 25 basis points (bps) on November 7, according to all 111 economists in a Reuters poll, with over a 90% majority expecting another quarter-percentage-point move in the December meeting.

On the UK’s front, the government is set to deliver Labour’s first Budget in almost 15 years on Wednesday. Rachel Reeves, the UK Chancellor of the Exchequer, might be preparing to unveil £40 billion in tax hikes and spending cuts overall. Employer National Insurance contributions, capital gains tax, and inheritance tax allowances are all possible targets.

Commerzbank analysts noted that if the budget combines austerity with hope of tackling long-term investment, “This should be positive for the pound as it would strengthen the U.K.’s long-term growth potential.”