GBPUSD extends its rebound over 1.1200 as market sentiment improves and US NFP buzzes

After surpassing the round-level resistance of 1.1200 during the Tokyo session, the GBPUSD pair has accumulated more gains. After detecting a loss of negative momentum, the Cable rallied from 1.1150. As investors shrug off uncertainties in front of the US Nonfarm Payrolls (NFP) report, the risk appetite is beginning to turn positive.

The US dollar index (DXY) has fallen below 112.60 after struggling to surpass the important 113.00 barrier. Futures on the S&P500 have indicated a little comeback after being flat. While yields on 10-year US Treasuries have returned the majority of their gains and slid to 4.14 percent, the US Treasury market has remained relatively stable.

After the Bank of England (BOE) announced a 75-basis-point rate hike on Thursday, the British pound experienced a sharp decline (bps). The decision was consistent with estimates, but BOE Governor Andrew Bailey's commentary on the UK's recession depressed the pound. BOE Governor stated that the UK economy is in recession and that the scenario could persist two years longer than during the subprime mortgage crisis.

The recession situation indicates a negative economic growth rate, which will oblige the BOE not to increase interest rates further. This could result in a future widening of the policy gap between the Federal Reserve (Fed) and the Bank of England (BOE).

On the American front, the release of US employment data will assist market participants in making educated future decisions. According to the consensus, the US economy has added 200k jobs to the labor market, compared to 263k in the previous report. Also, the unemployment rate is estimated to be 3.6% higher.