GBP/USD sees upside above 1.2250 as risk-on impulse rebounds, UK Employment in focus
|- GBP/USD looks to scale above 1.2250 amid positive market sentiment.
- Brexit jitters on the expectation of a retaliatory move from the EU on the UK's unilateral move to reject NIP.
- This week, employment data from the UK and US Retail Sales will remain focused.
The GBP/USD pair is hovering around 1.2250 at open and is likely to elevate further amid a rebound in the risk-sensitive assets experienced on Friday, which is expected to be carry-forwarded on Monday. The FX domain found relief on Friday after a spree of bearish days amid back-to-back economic events in the US economy.
The announcement of the interest rate decision by the Federal Reserve (Fed) in which the central bank stepped up its benchmark rates by 50 basis points (bps), followed by upbeat Nonfarm Payrolls (NFP) and higher-than-expected Consumer Price Index (CPI) spooked the market participants.
The US agencies reported the additional jobs in the total labor force at 428k, much higher than the estimates of 391k, which US inflation recorded at 8.3%, higher than the forecasts of 8.1%. The above-expected recordings from the US economy have raised the odds of one more jumbo rate hike by the Fed in its monetary policy in June.
Now, investors’ focus will shift to the US Retail Sales on Tuesday. A preliminary estimate for the monthly Retail Sales is 0.7%.
On the pound front, sterling remained mute on the underperformance of the Gross Domestic Product (GDP) numbers. The quarterly GDP landed at 0.8%, lower than the consensus of 1%. Meanwhile, Brexit jitters have elevated further as some retaliatory moves are expected from the European Union (EU) as the UK is likely to lay the groundwork to unilaterally disapply parts of the Northern Ireland Protocol (NIP), said TD Securities.
Now investors are focusing on releasing the ILO Unemployment Rate to be unveiled by the UK National Statistics on Tuesday. The economic data is seen unchanged at 3.8%.
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