Forex Today: Pound rises on upbeat employment data, US Dollar retreats as yields turn south

The British Pound was the standout performer in major currency markets early on Tuesday after the latest UK labour market report came in stronger than the previous month, while the US Dollar lost traction as Treasury yields failed to extend the previous session's rebound.

According to the figures published on Tuesday, the UK Employment Change rose to 102,000 in the reporting period, up from 67,000 previously. Annual wage inflation, measured by Average Earnings Excluding Bonus, ticked higher to 3.7% from 3.6%. The combination of firmer hiring and slightly faster pay growth was read by markets as reducing the case for near-term policy easing at the Bank of England, with commentary around the release pointing to firmer expectations of further tightening.

GBP/USD gathered upward momentum immediately after the data and was last seen trading near 1.3350, about 0.4% higher on the day. Sterling's strength was visible across the board rather than purely a function of a softer Dollar: GBP/JPY advanced roughly 0.2% to a one-month high around 211.20, while EUR/GBP slipped about 0.2% to trade near 0.8400. Tables of intraday performance showed the Pound posting its largest gain against the US Dollar among the majors.

On the Dollar side, the US Dollar Index had reversed modest early losses on Monday and finished the session virtually unchanged, helped by a recovery in US Treasury yields. Separate wire coverage of Monday's session noted the index ended two days of losses with a 0.2% gain to 101.98, while the 10-year Treasury yield sat at about 5.131%. That support faded on Tuesday, with the 10-year yield easing back toward 5.1% and the Dollar Index slipping into negative territory below 101.80.

Despite the softer Greenback, the Euro was unable to mount a sustained recovery. EUR/USD remained below 1.1250 through the European morning, with sentiment toward the single currency held back by France's fiscal and political difficulties and concerns about slowing growth. The spread between French and German 10-year government bond yields widened by 9.9 basis points on Monday to 147.3 basis points, underlining that investors are still pricing in elevated French sovereign risk. Analysts quoted in wire coverage described Europe as the less convincing part of an otherwise improving risk backdrop, noting that the Euro's relative resilience suggested traders were not yet treating the situation as a systemic European problem.

Elsewhere in the majors, USD/CAD declined for a fourth consecutive session, losing roughly 0.2% to trade below 1.4100. Canadian data released on Monday showed the Consumer Price Index rose 0.1% month-on-month in September, following a 0.1% decline in August and undershooting the market consensus of 0.2%. USD/JPY held close to 158.50 in Asian trading as participants stayed on the sidelines, with elevated US yields offering the Dollar some support against the Yen. Reuters reported that the Bank of Japan is expected to leave rates unchanged at its October meeting while raising its inflation forecasts, and Japan's National Consumer Price Index release is scheduled for Friday.

The remainder of Tuesday's calendar featured ZEW sentiment readings for Germany and the Eurozone during the European session, followed by September Housing Starts, Building Permits and Pending Home Sales in the United States. Market participants were also continuing to monitor the path of US yields, which have been a key driver of both Dollar direction and broader risk appetite in recent sessions.

Follow EUR/USD, GBP/USD, USD/JPY and XAU/USD on Puqet: WOZILA, our forex & gold signal service, publishes trade ideas with a stated entry, stop-loss and take-profit, and explains how each one is tracked.

This is a news summary for general information only — not financial advice, and nothing here is a recommendation to buy or sell any currency or metal. Exchange rates and gold prices can move sharply around data releases and central-bank decisions, and trading them carries a real risk of loss, which leverage magnifies. Always verify against the original source and do your own research before making a financial decision.