- GBP/USD aims for a downside establishment after the upbeat US NFP.
- Despite a lower consensus for US inflation, Fed’s hawkish stance will remain intact.
- The UK is expected to display a subdued performance this week.
The GBP/USD pair has declined gradually towards the immediate support of 1.2050 but is likely to extend losses after violating the immediate support. The cable is expected to reclaim its weekly lows near 1.2000 as the US dollar index (DXY) is expected to display a stellar performance ahead after the upbeat US Nonfarm Payrolls (NFP).
The US Nonfarm Payrolls (NFP) landed at 528k, significantly higher than the expectations of 250k and the prior release of 372k. Investors were expecting that commentary from US corporate players citing a halt in the recruitment process after the Fed hiked interest rates to squeeze liquidity from the market will make the US economy crippled in employment generation.
The US economy is seeing soaring price pressures and a solid labor market has always been a major supporting factor in announcing policy tightening measures. Now, the continuous upbeat performance from the US labor market will support Fed chair Jerome Powell to announce rate hikes unhesitatingly. Also, the Unemployment Rate has trimmed to 3.5% against expectations and the former print of 3.6%.
This week, the US Inflation data and UK’s GDP numbers will be of key importance. Lower oil prices in July after displayed an exhaustion sign in the US price pressures. The US inflation is likely to slip lower to 8.7% from the prior release of 9.1% on an annual basis. However, the core inflation that doesn’t inculcate oil and food prices may improve to 6.1%.
On the UK front, the UK Gross Domestic Product GDP) data will be of utmost importance. As per the market consensus, the economic data is expected to shift downward to 2.8% from the prior release of 8.7 on an annual basis for the second quarter of CY2022.
|Today last price||1.2056|
|Today Daily Change||0.0000|
|Today Daily Change %||0.00|
|Today daily open||1.2056|