GBP/USD moves little post-UK employment details, flat-lined above 1.3200 mark
|- GBP/USD struggled to gain any meaningful traction amid a modest USD strength.
- Upbeat UK employment details failed to impress bulls or provide a fresh impetus.
- Reduced BoE rate hike bets acted as a headwind amid Brexit-related uncertainties.
The GBP/USD pair held steady above the 1.3200 round-figure mark and moved little following the release of the UK monthly employment details.
The UK Office for National Statistics reported that the number of people claiming unemployment-related benefits dropped by 49.8K in November as against the 14.9K fall in the previous month. Adding to this, the ILO Unemployment Rate edge lower from 4.3% to 4.2% during the three months to October. Further details revealed that wage pressures moderated slightly going into year-end.
The data, however, did little to provide any meaningful impetus to the British pound amid diminishing odds for an imminent interest rate hike by the Bank of England at its upcoming meeting on Thursday. This, along with persistent Brexit uncertainties, continued acting as a headwind for the sterling and capped the upside for the GBP/USD pair amid a modest US dollar strength.
The greenback stood tall near a one-week high and remained well supported by the prospects for an early policy tightening by the Fed. In fact, the money markets indicate the possibility of an eventual liftoff by June 2022 and another hike as early as November. Apart from this, economic risks emerging from the spread of the Omicron variant further underpinned the safe-haven USD.
Meanwhile, the GBP/USD pair's inability to gain any meaningful traction suggests that the recent bearish trend witnessed since October might still be far from being over. That said, investors might refrain from placing aggressive bets ahead of the key central bank event risks. The Fed will announce its policy decision on Wednesday and the BoE meeting is scheduled on Thursday.
Hence, it will be prudent to wait for acceptance below the 1.3200 mark before positioning for any further depreciating move. Market participants now look forward to the US Producer Price Index for some impetus later during the early North American session. Trades will further take cues from the broader market risk sentiment to grab some opportunities around the GBP/USD pair.
Technical levels to watch
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