- 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.
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 losses below 0.6750 as China woes re-emerge
AUD/USD is off the lows, still in the red below 0.6750 in Asian trading on Tuesday. The Aussie pair suffers from gloomy China's economic outlook, although it finds some comfort from hawkish RBA Minutes, Hauser's comments and a broad US Dollar retreat. Fedspeak eyed.
USD/JPY cuts losses on the road to recovery toward 148.00
USD/JPY is paring losses on its way back to 148.00 in the Asian session on Tuesday. The pair remains weak amid a risk-aversion wave, as China's economic worries re-emerge and keep the safe-haven Japanese Yen afloat. The US Dollar retreat also undermines the pair ahead of Fedspeak.
Gold threatens key $2,630 support ahead of more Fedspeak
Gold price maintains its corrective decline early Tuesday, looking to threaten the lower boundary of the recent range at $2,630. The focus now remains on the Middle East tensions, additional Chinese stimulus rollout and speeches from US Federal Reserve policymakers for fresh directives.
Trump-related meme coins rally following high Polymarket odds and endorsement from Elon Musk
Polymarket data on Monday revealed that Donald Trump's odds over Kamala Harris in the presidential race surged to 54%, establishing an 8% lead for the Republican candidate. Following the lead, Trump-based meme coins saw double-digit gains.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.