GBP/USD oscillates around 1.1700, spotlight shifts to US NFP

The GBP/USD pair has turned sideways after facing barricades around 1.1750 on Monday. The cable is oscillating in a narrow range of 1.1700-1.1710 in the early Tokyo session as investors are arranging their trades ahead of the US Nonfarm Payrolls (NFP), which will release later this week. On a broader note, the asset has displayed a pullback move after remaining in a negative trajectory. The asset printed a fresh two-year low at 1.1648 and a pullback move lacks conviction as the context is still bearish.

Federal Reserve (Fed)’s restrictive stance over guidance on interest rates dictated at Jackson Hole Economic Symposium is still haunting the risk-perceived currencies. Fed chair Jerome Powell is clear with his focus on bringing price stability first despite sacrificing growth prospects and unemployment. Although, it is necessary to tackle the inflation monster first as the price rise index has reached a whopping figure of 8.5% and is impacting the savings and consumption pattern of the households.

As per the preliminary estimates, the US Nonfarm Payrolls (NFP) is seen at 290k, lower than the prior release of 528k. Also, the Unemployment Rate is expected to remain stable at 3.5%. The economic data which could impact the greenback is the Average Hourly Earnings, which is likely to shift higher by 10 basis points (bps) at 5.3%. As price pressures are advancing dramatically, earnings have remained subdued. Therefore, households are facing headwinds amid higher payouts for inflation-adjusted goods and services.

On the UK front, investors are gearing up ahead of the elections season. The UK economy is going through a rough phase of political instability after the resignation of UK Prime Minister Boris Johnson. The UK markets will still remain in turmoil as energy crisis are crossing rooftops and may impact the households’ consumption further.