GBP/USD: Pound Eyes $1.30 Ahead of US Jobs Report

Easing expectations of a rate cut by the Bank of England saw the pound climb steadily higher versus the US Dollar on Thursday. The Pound US Dollar exchange rate rallied 0.6% to close the day at US$1.2950.

GBP/USD is pushing higher in early trade on Friday. At 0:700 UTC GBP/USD was trading up 0.1% at US$1.2967.

After three straight sessions of gains the pound is on track to advance 1% against the greenback this week, snapping two weeks of decline.

BoE Non-Action Supports Sterling

Central Bank action or non-action has been in focus this week after the Federal Reserve surprised the market with a punchy 50 basis points rate cut on Monday. Comment by the incoming Bank of England Governor Andrew Bailey have calmed investors’ nerves over an imminent rate cut by the BoE.

Andrew Baily has said that he would prefer to wait and see what the Chancellor brings in the Budget on 11^th March before rushing into any cutting decisions. He also mentioned that he would wait for further data. His comments suggest that there is unlikely to be a between meetings rate cut, like the Fed.  Meaning nothing is likely to happen until the meeting on 26^th March.

Brexit news has been more of a drag on the pound. Chief EU negotiator Michel Barnier warned of serious difference between the EU and the UK at the end of the first week of post Brexit trade talks.

Today, following the first coronavirus death in the UK and a sharp increase in the number of confirmed cases coronavirus will remain in focus.

US Non-Farm Payrolls To Lift Dollar?                          

After a bumper month of job creation last month investors will be watching closely to see if the coronavirus outbreak has impacted the US jobs market. Analysts are forecasting 175,000 jobs were created in February, following January’s impressive 225,000. The unemployment rate is expected to remain unchanged at 3.6% and hourly earnings to gain 0.3%

After a beat on the private payrolls and an increase in the employment component of the ISM non-manufacturing pmi, the lead indicators are pointing to an upbeat non far payroll reading, despite the recent coronavirus feared slowdown. A strong reading could remind US dollar investors that the US economy remains on a firm footing. Any signs of weakness could be met with panic and the assumption that the Fed will cut rates again.

Currencylive.com is a news site only and not a currency trading platform.

Currencylive.com is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on currencylive.com do not represent our views.