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Market News GBP/USD anticipates a decline below 1.2050 in advance of US Inflation

GBP/USD anticipates a decline below 1.2050 in advance of US Inflation

GBP/USD hopes for a decline after the positive US NFP report. Despite a reduced consensus for US inflation, the Fed will maintain its aggressive posture. This week, the United Kingdom is predicted to exhibit a lackluster performance.

Alina Haynes
2022-08-08
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The GBP/USD pair has gradually slid toward the immediate support of 1.2050, but is expected to extend losses after breaching the support. The cable is anticipated to recapture its weekly lows near 1.2000 as the US dollar index (DXY) is anticipated to exhibit a remarkable performance in the near future following the positive US Nonfarm Payrolls report (NFP).

 

The Nonfarm Payrolls (NFP) for the United States came in at 528k, much higher than the anticipated 250k and the previous release of 372k. Investors anticipated that comments from US corporate players noting a halt in the recruitment process after the Fed raised interest rates to stifle market liquidity would damage employment creation in the US economy.

 

The US economy is seeing escalating pricing pressures, and a robust labor market has historically been a primary factor in announcing policy tightening. Now, the persistently positive performance of the US labor market will encourage Fed chair Jerome Powell to confidently announce rate hikes. In addition, the Unemployment Rate has decreased to 3.5%, below both predictions and the previous reading of 3.6%.

 

This week, the US Inflation data and the UK GDP figures will be of utmost importance. After US pricing pressures showed signs of weariness in July, oil prices decreased. Annual US inflation is projected to decrease to 8.7 percent from the previous reading of 9.1 percent. However, core inflation, which excludes oil and food costs, may rise to 6.1 percent.

 

On the British front, the Gross Domestic Product (GDP) numbers will be crucial. According to the market consensus, the economic statistics for the second quarter of CY2022 is predicted to decrease from 8.7 percent to 2.8 percent on an annual basis.


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