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May 13 - 11:55 AM

GBP/USD - COMMENT-Sterling Bulls Eye UK Employment Data For Hints Of UK Policy Shift

By Paul Spirgel  —  May 13 - 10:16 AM

GBP/USD was little changed on Thursday after recovering earlier lossesnL1N2N00WC, but its bullish tone may be on hold after moving back within its Bolli envelope following the previous session's U.S. inflation data.

Despite strong U.S. CPI and PPI, the Fed remains determined not to engage in policy decisions based on what it sees as near-term transitory inflation gains, focusing instead on the jobs component of its dual mandate, employment.

Thursday's jobless claims were on-target nL8N2N03VC, a relief after Friday's disappointing payrollsnL1N2MT2XD.

With noFed rates movement expected soon, sterling traders will be vigilant in parsing UK data for hints at a shift in BoE monetary policy.

Next week's UK employment data EM will be significant.
Should UK employment data show rising employment and earnings, GBP/USD is likely to resume its upward trajectory rising above recent highs in the mid-1.41s and putting the Feb.
24 high at 1.4240 in focus.

A less-than-stellar employment showing, inline with U.S. employment gains, would temper UK taper and rate expectations and keep GBP/USD anchored within its recent range.
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Source:
Refinitiv IFR Research/Market Commentary

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