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As GBP/USD Extends Its Decline Above The Mid-1.2500s, Attention Turns To US Jobless Claims Data
The USD's strength maintains selling pressure on the GBP/USD near 1.2560. Forecasters now expect the Fed to maintain interest rates until July, which is later than previously anticipated. Bailey of the Bank of England stated that interest rates in the United Kingdom must remain at their current levels for some time. Investors anticipate new impetus from the weekly US Jobless Claims report.
On Thursday morning, the GBP/USD pair extends its downside movement beyond the mid-1.2500s during Asian trading hours. The decline in the pair is generally supported by the strengthening US Dollar (USD). Given the lack of economic data anticipated from the United Kingdom later this week, the GBP/USD pair continues to be influenced by the price dynamics of the USD. The main pair is trading at 1.2560 at press time, an increase of 0.03% for the day.
Despite Jerome Powell's statement last week that central banks are prepared to further tighten policy if the situation warrants it, the markets currently hold the belief that the tightening cycle has concluded. Analysts anticipate the Federal Reserve will maintain interest rates until at least July, which is later than previously believed, according to a Reuters poll.
Automatic Data Processing Inc. disclosed on Wednesday that ADP private payrolls increased by 103,000 in November, compared to 106,000 in October, which was below the 130,001 increase predicted by the market.
Regarding the GBP, Andrew Bailey, governor of the Bank of England (BoE), stated on Wednesday that interest rates in the United Kingdom will likely have to remain at their current levels for some time, and that the central bank is cognizant of potential financial stability risks as a result.
Furthermore, Bailey asserted that the prevailing risk environment was arduous on account of China's economic woes, the possibility of an expanded conflict in the Middle East, and heightened levels of public debt. Consequently, the British Pound (GBP) could be impacted negatively, creating a headwind for the GBP/USD pair.
Traders will now turn their attention towards the weekly US Jobless Claims report, which is scheduled for release later on Thursday. Friday's release of US employment data, including nonfarm payrolls and the unemployment rate, will be the event of the week. It is anticipated that November Nonfarm Payrolls will increase employment by 185,000, while the unemployment rate will remain unchanged at 3.9%.
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