GBP/USD pressured by late US Dollar comeback and central bank divergence themes


  • 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. 

GBP/USD

Overview
Today last price 1.2017
Today Daily Change -0.0028
Today Daily Change % -0.23
Today daily open 1.2045
 
Trends
Daily SMA20 1.2047
Daily SMA50 1.2141
Daily SMA100 1.1985
Daily SMA200 1.1916
 
Levels
Previous Daily High 1.2049
Previous Daily Low 1.1943
Previous Weekly High 1.2143
Previous Weekly Low 1.1922
Previous Monthly High 1.2402
Previous Monthly Low 1.1915
Daily Fibonacci 38.2% 1.2008
Daily Fibonacci 61.8% 1.1983
Daily Pivot Point S1 1.1975
Daily Pivot Point S2 1.1906
Daily Pivot Point S3 1.1869
Daily Pivot Point R1 1.2081
Daily Pivot Point R2 1.2118
Daily Pivot Point R3 1.2188

 

 

Share: Feed news

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


Recommended content

Editors’ Picks

EUR/USD extends recovery beyond 1.0400 amid Wall Street's turnaround

EUR/USD extends recovery beyond 1.0400 amid Wall Street's turnaround

EUR/USD extends its recovery beyond 1.0400, helped by the better performance of Wall Street and softer-than-anticipated United States PCE inflation. Profit-taking ahead of the winter holidays also takes its toll. 

 

EUR/USD News
GBP/USD nears 1.2600 on renewed USD weakness

GBP/USD nears 1.2600 on renewed USD weakness

GBP/USD extends its rebound from multi-month lows and approaches 1.2600. The US Dollar stays on the back foot after softer-than-expected PCE inflation data, helping the pair edge higher. Nevertheless, GBP/USD remains on track to end the week in negative territory.

GBP/USD News
Gold rises above $2,620 as US yields edge lower

Gold rises above $2,620 as US yields edge lower

Gold extends its daily rebound and trades above $2,620 on Friday. The benchmark 10-year US Treasury bond yield declines toward 4.5% following the PCE inflation data for November, helping XAU/USD stretch higher in the American session.

Gold News
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers

Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers

Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.

Read more
Bank of England stays on hold, but a dovish front is building

Bank of England stays on hold, but a dovish front is building

Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures