GBP/USD seesaws around 1.2155-60 while printing the first daily gains in three amid early Good Friday morning in London. In doing so, the Cable pair cheers hawkish hopes from the Bank of England (BoE) while also portraying the cautious mood ahead of the key US Nonfarm Payrolls (NFP).
Andrew Goodwin, Chief UK Economist at Oxford Economics suggests another 0.25% rate hike from the “Old Lady”, as the BoE is informally known, amid persistent inflation pressure.
That said, the UK’s house price index signaled intact price pressure even if the BoE’s Monthly Decision Maker Panel (DMP) survey hints at likely easing the Consumer Price Index (CPI), from 5.9% expected in February to 5.8% for one-year ahead measure.
On the other hand, fears that the new Brexit deal will deter the European Union (EU) imports, per BBC News, seem to challenge the GBP/USD prices. The news quotes a Cold Chain Federation while stating that new plans for post-Brexit border checks on goods coming into the UK will deter many EU suppliers and push up food prices.
Elsewhere, downbeat US data raise fears of no rate hikes from the Federal Reserve (Fed) in May and weigh on the US Dollar. However, the same US statistics trigger recession woes and put a floor under the greenback. With this, the US Dollar Index (DXY) clings to mild gains around 102.00.
Talking about the US data, Initial Jobless Claims improved to 228K for the week ended on March 31 versus 200K expected and upwardly revised 246K prior. It’s worth noting that the Challenger Job Cuts for the said month rose to 89.703K from 77.77K prior. Previously, US JOLTS Job Openings dropped to the 19-month low in February while the ADP Employment Change for March also disappointed markets with 145K figures. Further, the US ISM Services PMI for March also amplified pessimism as it dropped to 51.2 versus 54.5 expected and 55.1 prior.
Amid these plays, market sentiment remains sour and the yields seem to pause recent downside, which in turn challenges the GBP/USD buyers. However, it all depends upon the US employment report for fresh calls.
A one-month-old ascending trend channel, currently between 1.2375 and 1.2550, defends GBP/USD bulls.