- The GBP/USD pair traded with volatility after the release of the data, although it resumed its bearish trend.
- US nonfarm payrolls numbers beat estimates, leading traders to rule out a Fed rate cut for 2024.
- Traders are attentive to the release of the University of Michigan Consumer Sentiment Survey.
The pair GBP/USD fell 0.50% in early trading of the North American session, buoyed by news showing the United States (US) economy continued to hold up as the workforce added more jobs than expected. At the time of writing these lines, the pair is trading at 1.2505, after trading with volatility between 1.2578/1.2511 upon publication of the news.
US economy remains stronger than expected, hence GBP/USD falls to new weekly lows
The US Bureau of Labor Statistics (BLS) revealed that 199,000 jobs were created in November, according to the Nonfarm Payrolls report. Market participants estimated an increase of 180,000, driven primarily by gains in the healthcare sector and auto industry workers. Digging deeper into the data, the unemployment rate dropped from 3.9% to 3.7%. Average hourly earnings rose the expected 4% in annual readings, while month-on-month figures rose to 0.4% from 0.2% the previous month.
Following the release of the data, trade had put the US Federal Reserve’s rate cut expectations for the following year on par. According to data from the Chicago Board of Trade (CBOT), 120 basis points of rate cuts are estimated, 20 bp less than a week ago.
Meanwhile, the Dollar recovers from Thursday’s losses, as the Dollar Index (DXY) rises 0.50% to 104.15. US Treasury yields are rising from the short end to the long end of the curve. The 10-year Treasury yield stands at 4.235%, gaining eight basis points.
In the United Kingdom, the economic agenda is thin and traders are awaiting the Bank of England (BoE) meeting next week. Economists expect the BoE to remain unchanged, although rate cut estimates for 2024 call for an easing of monetary policy by 80 basis points.
During today’s trading, the GBP/USD pair will be attentive to the publication of the University of Michigan (UM) Consumer Sentiment Survey and inflation expectations.
GBP/USD Price Analysis: Technical Insights
Friday’s price action has taken GBP/USD close to the 200-day moving average (DMA) at 1.2488, although it remains above 1.25. A decisive break of the latter will expose the aforementioned support level, immediately followed by the 100-DMA at 1.2462. Downside risks will strengthen once these two support levels are broken, opening the door towards 1.2400. On the other hand, if buyers keep the exchange rate above 1.2500, they could threaten to reclaim 1.2550.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
