- GBP/USD is looking for a cushion around 1.2060 after a marginal selling pressure.
- Accelerating interest rates and weak economic projections have led to a decline in consensus for US ADP employment.
- Sterling reserve is under threat amid multiple headwinds ahead, as cited by Natixis.
The GBP/USD pair has sensed a marginal selling pressure at open and has dropped near the immediate support of 1.2060 in the early Asian session. The positive sentiment is still solid, therefore, recovery is highly expected in the Pound Sterling.
The US Dollar Index (DXY) has sensed some strength after dropping to near the round-level support of 106.00. Meanwhile, the 10-year US Treasury yields are failing to cross the 3.70% hurdle as the Federal Reserve (Fed) is highly expected to ditch the 75 basis points (bps) rate hike spell in its December monetary policy meeting. S&P500 remained subdued on Friday amid the absence of a potential trigger that could drive global markets.
This week, the market participants are preparing for the release of the US Nonfarm Payrolls (NFP) data. But before that, Wednesday’s Automatic Data processing (ADP) Employment data will provide meaningful cues to investors. As per the projections, the economic data is expected to decline to 200k vs. the prior release of 239k. As interest rates are accelerating dramatically and economic projections are facing heat, firms have ditched their recruitment process for the time being.
The bleak growth outlook for the shopping season while Christmas is expected to impact demand for employees in the United States economy. US businesses are hiring fewer seasonal workers this holiday shopping season, as stubborn inflation dims the outlook for retail sales as reported by Financial Times. Employers posted 8.2 percent fewer holiday openings this year than last year, according to jobs site Indeed FT further added.
On the United Kingdom front, a note from analysts at Natixis indicates that “Sterling’s reserve currency role is under threat, particularly since the Brexit referendum, led by relatively weak growth, the reduced appeal of the UK for corporate investment, awareness of the small size of the UK economy relative to its reserve currency status, a decline in labor force due to the departure of Europeans and the onset of a vicious circle where because pound sterling is less attractive, it depreciates, which in turn makes it less attractive still.”
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
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
EUR/USD comfortable below 1.0800 lower lows at sight
The EUR/USD pair lost ground on Thursday and settled near a fresh March low of 1.0774. Strong US data and hawkish Fed speakers comments lead the way ahead of the release of the US PCE Price Index on Friday.
Gold price finishes Thursday’s session set to reach new all-time highs
Gold price rallied during the North American session on Thursday and hit a new all-time high of $2,225 in the mid-North American session. Precious metal prices are trending higher even though US Treasury yields are advancing, underpinning the Greenback.
Google starts indexing Bitcoin addresses
Bitcoin address data is live on Google search results after users realized on Thursday that the tech giant started indexing Bitcoin blockchain data. However, mixed reactions have followed the tech giant's reversed stance on the cryptocurrency.
A Hollywood ending for fourth quarter GDP
The latest revisions put Q4 GDP at 3.4%, the second fastest quarterly growth rate in two years. Much of the upside was attributable to stronger consumer spending, yet fresh profits data affirmed it was a good quarter for the bottom line as well with profits up by the most since the Q2-2022.