GBP/USD regains above the mid-1.2700s ahead of US NFP data
|- GBP/USD attracts some buyers near 1.2745 in Friday’s early Asian session.
- The US ISM PMI for January registered the strongest improvement since September 2022.
- The Bank of England (BoE) held borrowing costs at 5.25% at its January meeting on Thursday.
- US Nonfarm Payrolls (NFP) will be the highlight on Friday.
The GBP/USD pair regains above the 1.2700 mark during the early Asian session on Friday. The Bank of England (BoE) decided to keep the interest rate steady at 5.25% at its January meeting on Thursday, citing the need to see more evidence that inflation would continue falling. Investors await the US Nonfarm Payrolls (NFP) on Friday for fresh impetus. The major pair currently trades around 1.2745, losing 0.01% for the day.
The US Federal Reserve (Fed) indicated that the central bank will delay rate cuts until it sees more evidence that inflation is sustainably under control. Fed Chair Jay Powell said on Wednesday that rate cuts in the March meeting were not the central bank's "base case.”
On Thursday, the US ISM Manufacturing PMI improved sharply in January, coming in at 49.1 from the previous month's number of 47.1. The attention will shift to the US Nonfarm Payrolls (NFP) due later on Friday for further clarity on the interest rate path. According to the CME Fed Watch Tool, traders have priced in a 96% odds of a rate cut in May.
The BoE maintained interest rates unchanged at 5.25% on Thursday, but a decline in inflation could mean a cut in the cost of borrowing around Q3 2024. The UK central bank governor, Andrew Bailey, said that the BoE had seen good news on inflation over the past few months, and they need to see more evidence that inflation is set to fall to the 2% target before they can lower interest rates.
The January US labor market data, including Nonfarm Payrolls, Unemployment Rate, and Average Hourly Earnings will be released on Friday. The US economy is estimated to add 180K jobs in January from the 216K job additions in December.
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.