- GBP/USD losing ground as a comeback in the greenback kicks in.
- Eyes turn to the Fed's chairman Powell and US NFP.
GBP/USD is down some 0.2% on the day as we head toward the Wall Street close with the price traveling between 1.1992 and 1.2048. Despite a soft US Dollar at the start of the day as investors awaited testimony by Federal Reserve Chair Jerome Powell and Nonfarm Payrolls, GBP stayed pressured as central bank divergences play out.
The Federal Reserve may keep raising interest rates into June while the Bank of England could soon pause policy tightening while the BOE may only have 25bp more of tightening left to do. Key survey data suggest tightness in the UK labour market is abating and the Gross Domestic Product is up next for review.
Analysts at TD Securities argued that it is set to bounce back sharply as many of the special factors that weighed on the December data will reverse. ''A downtick in strike action, a jump in hospital visits, the resumption of the Premier League after the end of the World Cup, and a bounce-back in school attendance likely drove a 0.7% m/m increase in services output. Underlying growth dynamics likely remained weak though,'' the analysts argued.
Meanwhile, Federal Reserve chairman Jerome Powell’s testimony before Congress on Tuesday and Wednesday will be a driver for the US Dollar as will the jobs report. The analysts at Danske Bank are expecting growth to moderate to 220k after the effects of warm weather and heavy seasonal adjustments in January faded. ''Overall, leading indicators suggest that labor market conditions have remained tight amid a recovering growth outlook. The FOMC blackout period will begin on Saturday 11th of March, so Fed still has the option to guide the markets after the Jobs Report.''
Meanwhile, Fed funds futures traders are pricing in a 76% probability the Fed will raise rates by 25 basis points at its March 21-22 meeting, and a 24% likelihood of a 50 basis points increase.
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 stabilizes near 1.0800 as trading action turns subdued
EUR/USD holds steady near 1.0800 on Thursday and remains on track to end the day in negative territory following upbeat macroeconomic data releases from the US. The action in financial markets turn subdued as trading volumes thin out heading into Easter holiday.
GBP/USD extends sideways grind above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth help the USD stay resilient against its rivals and limits the pair's upside.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.