GBP/USD bulls are in the market testing bear commitments at 1.2100

GBP/USD is 0.33% higher after the pair moved up from a low of 1.2063 to a high of 1.2103 following its biggest jump since January 6 while the US Dollar weakens broadly after Friday's US labour market.

Nonfarm Payrolls showed a robust jobs growth although the rise in the Unemployment Rate and signs of cooling wage inflation have led markets to trim bets that the Federal Reserve will raise interest rates as sharply. The United States added 311,000 payrolls in February and the unemployment rate rose to 3.6%. However, a survey of economists polled by Reuters expected the United States to have added 205,000 jobs last month and the unemployment rate to hold steady at 3.4%. Average hourly earnings rose 0.2% last month after gaining 0.3% in January, below expectations of 0.3%.

Also, Britain's economy was shown to have grown by more than expected in January, further allaying fears of a recession. The Office for National Statistics (ONS) said Britain's economy expanded 0.3% month-on-month, after a drop of 0.5% in December. A Reuters poll of economists had pointed to growth of 0.1%.

Meanwhile, the closing of SVB Financial Group is the largest bank failure since the financial crisis. Nevertheless, the Biden administration on Sunday guaranteed that customers of the failed Silicon Valley Bank will have access to all their money starting Monday. In a joint statement Sunday, Treasury Secretary Janet Yellen, Federal Reserve Chair Jerome Powell and Federal Deposit Insurance Corporation Chairman Martin J. Gruenberg said the FDIC will make SVB and Signature’s customers whole. 

Looking ahead, the calendar is packed with US consumer Price Index and UK labour market data. ´´The labour market should soften in Jan, with the unemployment rate rising and wage growth falling, as the official data continues to catch up to high-frequency indicators,´´ analysts at TD Securities said. ´´Weaker wage growth will be particularly welcomed by the BoE after last month's upside surprise. However, with US CPI out later in the day, market reaction may be muted unless there's a large surprise.´´