USD was broadly weaker across the board after Friday’s jobs numbers indicated a cooling labour market. Whilst the non-farm payroll print came in higher showing 275,000 job additions in February, it was the lower-than-expected hourly earnings and higher unemployment rate that stirred markets, seeing GBPUSD hit the highs of July 2023. EURUSD also went through prior resistance to climb near to the highs of 2024. Given the number of rate cuts expected by markets in the UK this year is less than the EU and the US, GBP was well in demand with GBPEUR climbing once again towards the highs of last year.
*Daily move - against G10 rates at 7:30am, 11.03.24
** Indicative rates - interbank rates at 7:30am, 11.03.24
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With GBPUSD breaking through key resistance last week and importantly closing above it, it seems the market may well be in the mood to continue to sell USD. Which means Tuesday’s US inflation numbers will be even more important to see if GBPUSD can test the July 2023 highs. Evidence of US CPI easing will likely be the catalyst to incite more USD selling. But before that, Tuesday morning sees the release of UK jobs data with wage growth being the key component.
Wednesday sees the release of GDP for January and whether this indicates the UK has come out of a recession, and on Thursday we focus back on the US with the release of retail sales and producer price inflation.
GBP soared to the highest levels since July last year as rate differentials and a rebound out of a recession continues to favour the currency. This week's focus on the currency will be job numbers tomorrow and January’s GDP print, and whether these data points can catapult GBP higher?
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