- GBP/USD consolidates amid a muted US Dollar on Monday.
- US Nonfarm Payrolls increased by 275K in February, against the expected 200K.
- Traders await employment data to gain fresh impetus on the United Kingdom’s labor market.
GBP/USD hovers around 1.2850 during the Asian session on Monday, maintaining a positive sentiment to potentially extend its winning streak that commenced on March 1. However, the US Dollar (USD) has received upward strength and recovered from intraday losses on Friday following the release of upbeat US Nonfarm Payrolls data.
In February, US Nonfarm Payrolls increased by 275K, surpassing January’s figure of 229K and beating expectations of 200K. However, US Average Hourly Earnings (YoY) grew by 4.3%, slightly below both the estimated and previous reading of 4.4%. Monthly, there was an increase of 0.1%, which was lower than the anticipated 0.3% and the previous month’s 0.5%.
The GBP/USD pair continues to maintain a positive tone as markets widely anticipate the Federal Reserve (Fed) to cut interest rates before the Bank of England (BoE), potentially narrowing the policy divergence between the two central banks for a period. Federal Reserve (Fed) Chair Jerome Powell, during his testimony before the US Congress last week, reiterated the central bank’s stance. Powell hinted at potential cuts in borrowing costs sometime this year, emphasizing that such actions would be contingent upon the inflation trajectory aligning with the Fed’s target of 2%.
Last week, UK Chancellor of the Exchequer Jeremy Hunt delivered the Spring Budget to Parliament. This boosted positive sentiment surrounding the United Kingdom’s (UK) budget, particularly as the Office for Budget Responsibility (OBR) forecasted stronger economic growth.
Market participants eagerly anticipate employment data from the United Kingdom (UK), including the ILO Unemployment Rate (3M) and Employment Change figures, scheduled for release on Tuesday. Additionally, the Consumer Price Index data for February is also on the radar for investors and analysts alike.