- GBP/USD remains sidelined after a volatile day, grinds higher of late.
- Mostly upbeat UK jobs report, hopes of British government-labor deal underpin bullish bias for the Cable.
- Unimpressive US inflation, retreat in Treasury bond yields add to the upside expectations.
- UK CPI for February eyed for intraday directions; US data appears important too.
GBP/USD portrays the pre-data anxiety by treading water around 1.2180 during early Wednesday.
The Cable pair rose to the two-week high the previous day before reversing from 1.2270 as the US inflation propelled market moves. Even so, upbeat UK employment data joined hopes of overcoming the British workers’ strikes seemed to have put a floor under the GBP/USD prices.
Late Tuesday, the Financial Times (FT) quoted officials familiar with the matter to mention that UK Prime Minister Rishi Sunak and Finance Minister Jeremy Hunt are mulling giving NHS staff and other key workers a lump sum payment by backdating next year's pay award, which takes effect from April, likely to the start of January 2023.
Before that, the UK Office for National Statistics (ONS) released mixed employment numbers with an unchanged ILO Unemployment Rate of 3.7% for three months to December, contrasting with a decline in the Claimant Count Change, to -12.9K versus -3.2K prior. The details suggested an increase in Average Earnings, Excluding Bonuses and several payrolled employees, versus a fall in the UK vacancies. The mixed data, however, managed to help the British Pound (GBP) on release.
On the other hand, the US Consumer Price Index (CPI) rose past market expectations to 6.4% YoY but posted the slowest increase since 2021 while easing below 6.5% prior. Following the data, Dallas Fed President Lorie Logan stated that they must remain prepared to continue rate increases for longer than previously anticipated. On the same line was New York Fed President John Williams, who noted that the work to control too high inflation is not yet done. Additionally, Philadelphia Fed President Patrick Harker signaled that they are not done (with lifting rates), but they are likely close.
Against this backdrop, US 10-year Treasury bond yields seesaw around 3.75% after rising three basis points (bps) to refresh a six-week high, whereas the two-year counterpart jumped to the highest level since early November 2022 by poking 4.62%, around 4.61% at the latest. Further, S&P 500 Futures trace Wall Street’s downbeat closing to highlight the mildly offbeat mood.
Looking forward, the UK CPI for January, expected to ease to 10.3% YoY versus 10.5% prior, becomes crucial for the GBP/USD traders amid hopes that the Bank of England (BoE) has limited scope for further rate hikes. Following that, US Retail Sales and Industrial Production details for January and NY Empire State Manufacturing Index for February should be watched closely for clear directions.
Also read: UK Inflation Preview: Will softer CPI raise odds of a BoE pause?
Technical analysis
A successful break of the 50-DMA, around 1.2190 by the press time, becomes necessary for the GBP/USD buyers to keep the reins.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks

EUR/USD hits two-week tops near 1.0500 on poor US Retail Sales
The selling pressure continues to hurt the US Dollar and now encourages EUR/USD to advance to new two-week peaks in levels just shy of the 1.0500 barrier in the wake of disappointing results from US Retail Sales.

GBP/USD surpasses 1.2600 on weaker US Dollar
GBP/USD extends its march north and reclaims the 1.2600 hurdle for the first time since December on the back of the increasing downward bias in the Greenback, particularly exacerbated following disheartening US results.

Gold maintains the bid tone near $2,940
The continuation of the offered stance in the Greenback coupled with declining US yields across the board underpin the extra rebound in Gold prices, which trade at shouting distance from their record highs.

Weekly wrap: XRP, Solana and Dogecoin lead altcoin gains on Friday
XRP, Solana (SOL) and Dogecoin (DOGE) gained 5.91%, 2.88% and 3.36% respectively on Friday. While Bitcoin (BTC) hovers around the $97,000 level, the three altcoins pave the way for recovery and rally in altcoins ranking within the top 50 cryptocurrencies by market capitalization on CoinGecko.

Tariffs likely to impart a modest stagflationary hit to the economy this year
The economic policies of the Trump administration are starting to take shape. President Trump has already announced the imposition of tariffs on some of America's trading partners, and we assume there will be more levies, which will be matched by foreign retaliation, in the coming quarters.

The Best Brokers of the Year
SPONSORED Explore top-quality choices worldwide and locally. Compare key features like spreads, leverage, and platforms. Find the right broker for your needs, whether trading CFDs, Forex pairs like EUR/USD, or commodities like Gold.