Yesterday was a fairly quiet day on the data front and we saw limited movement as a consequence. We briefly saw GBP/USD dip below 1.3500 in the early European session but managed to erase a small portion of its daily losses in the second half of the day.
The heavy selling pressure surrounding the US dollar seems to have dissipated following the impressive January jobs report from the US, not allowing GBP/USD to regain its bullish momentum. The key Nonfarm Payrolls figure released on Friday showed an impressive increase of 467,000, surpassing the market expectation of 150,000 by a wide margin. Moreover, the annual wage inflation rose to 5.7% from 5%, ramping up the March interest rate hike probability to 30% from 8%.
Cautious remarks on the policy outlook from Bank of England Chief Economist Huw Pill also weighed on sterling, stating that “we should not anticipate that rate hikes will be aggressive in the medium-term”.
Have a great day.
Author: William Jones, Senior Relationship Manager.
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