- GBP/USD has slipped significantly to near 1.1570 on soaring UK long-run inflation expectations.
- The DXY is aiming higher despite the downbeat US ADP Employment Change.
- As per the consensus, the US ISM Manufacturing PMI is seen lower at 52.0
The GBP/USD pair is falling like a house of cards as the US dollar index (DXY) has reclaimed the round-level hurdle of 109.00 in the Asian session. The asset is declining towards its two-year low near 1.1500. The cable has displayed a vertical downside move after surrendering the critical support of 1.1600. Also, the asset has continued its four-day losing streak after slipping below Wednesday’s low at 1.1599.
After a former opening, the DXY is scaling higher and is expected to recapture its 19-year high at 109.46. The DXY has picked significant bids despite the downbeat US Automatic Data Processing (ADP) Employment Change data. The US economy has added 132k new jobs in the private sector. The unconventional methodology adopted by the US ADP agency to display the labor market situation more precisely didn’t result in a confident decline in the DXY.
As the Federal Reserve (Fed) already warned about softening labor market due to consecutive bumper rate hike announcements, investors didn’t go for an extreme sell-off in the DXY. Going forward, the US ISM Manufacturing PMI will be of utmost importance. The economic data is seen lower at 52.0 against the former figure of 52.8. This might have a major impact on the DXY.
Meanwhile, pound bulls are weakened over soaring long-run inflation expectations, which are expected to hit 4.8%, as per Citi. Also, public expectations for inflation over the coming 12 months rose to 6.3%. As energy and electricity prices are advancing dramatically amid political instability, inflation expectations are soaring and have crossed the Bank of England (BOE)’s long-term target of 2%.
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 remains under pressure above 0.6400
AUD/USD managed to regain some composure and rebounded markedly from Tuesday’s YTD lows in the sub-0.6400 region ahead of the release of the Australian labour market report on Thursday.
EUR/USD holds above 1.0650 amid renewed selling pressure in US Dollar
The EUR/USD pair edges higher to 1.0672 on Thursday during the early Asian session. The recovery of that major pair is bolstered by renewed selling pressure in the US Dollar and a risk-friendly environment.
Gold retreats as lower US yields offset the impact of hawkish Powell speech
Gold prices retreated from close to weekly highs during the North American session on Wednesday amid an improvement in risk appetite. The bullish impulse arrived despite hawkish commentary by US Federal Reserve officials.
Bitcoin price uptrend to continue post-halving, Bernstein report says as traders remain in disarray
Bitcoin price is dropping amid elevated risk levels in the market. It comes as traders count hours to the much-anticipated halving event. Amid the market lull, experts say we may not see a rally until after the halving.
Australia unemployment rate expected to rise back to 3.9% in March as February boost fades
Australia will publish its monthly employment report first thing Thursday. The Australian Bureau of Statistics is expected to announce the country added measly 7.2K new positions in March after the outstanding 116.5K jobs created in February.