- GBP/USD seesaws within a choppy range after two-day rebound from the lowest levels since late November 2022.
- Hopes of no recession in the UK, upbeat efforts to lure more stock market listings help Cable buyers.
- Mixed US data, pullback in yields weigh on US Dollar ahead of the key US jobs report.
- UK’s monthly GDP for January will be crucial to watch amid economic slowdown chatters but US NFP is the key.
GBP/USD makes rounds to 1.1930-20 during early Friday morning in Asia as bulls take a breather after the biggest daily jump in more than a week ahead of the key statistics from the UK and the US.
That said, the risk-off mood failed to extend the US Dollar’s run-up on Thursday amid US data, which in turn joined a retreat in the key US Treasury bond yields to weigh on the greenback. While portraying the mood, Wall Street benchmarks closed with more than 1.5% daily losses each but the US 10-year and two-year Treasury bond yields eased to 3.92% and 4.87% versus 5.08% and 4.01% daily open respectively. It should be noted that the US Dollar Index (DXY) managed to pare some of the daily losses by the end of Thursday but failed to ignore the biggest daily fall in a week.
At home, hopes of economic recovery and more stock market listings seem to help the Cable pair amid a light calendar during the week.
“The country's economy is on track to shrink less than expected this year and avoid the two-quarters of negative growth which mark a technical recession,” the British Chambers of Commerce (BCC) forecast on Wednesday per Reuters.
Britain’s finance ministry said on Wednesday it will launch a review into how investor research on companies could be improved to attract more listings, a step that follows a decision by UK chip designer Arm Ltd to only list in New York, reported Reuters.
On the same line, Britain's revamped financial market rules will largely be aligned with U.S. and European Union regulations to minimize disruption to global companies, its financial services minister Andrew Griffith said on Thursday per Reuters.
It’s worth observing, however, that Bank of England (BoE) policy maker Swati Dhingra warned against interest rate hikes on Wednesday while saying that overtightening poses a more material risk at this point. On the contrary, Fed Chairman Jerome Powell keeps his hawkish bias intact.
Given the fact that the BoE appears less hawkish than the Fed, a likely easing in today’s UK macros may allow the return of the GBP/USD bears. However, negative surprises from the US employment data for February won’t be taken lightly as the latest market chatters put less weight on the 50 bps talks than the mid-week conditions.
Also read: Nonfarm Payrolls Preview: Five scenarios for the Fed, USD and stocks reactions, with probabilities
Technical analysis
GBP/USD managed to regain its place above the 200-DMA level of 1.1900, after a two-day absence, which in turn keeps buyers hopeful.
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