The most recent US labor-market data saw GBP/USD gain, along with most other major currencies against the Dollar, as wagerelaxed a little and the unemployment rate edged higher. None of last week’s US action has seen rate-cut expectations brought forward from the markets’ current favorite month, June. However, it has seen those expectations become a little more certain, hence the Dollar’s broad weakness.
The UK’s inflation rate is trending lower and the country is no longer quite the alarming outlier it was here. However, at 4% the annual rate remains double the Bank of England’s target, and the overwhelming likelihood must be that US interest rates will come down before domestic ones, and possibly quite a long way before.
However, the UK has monthly Gross Domestic Product data on tap Wednesday, with employment numbers coming up the day before. Still, the Pound is unsurprisingly starting to look quite overbought and some consolidation would seem likely, even if that just puts GBP back into its prior range. The top of that range now offers support quite close to the market at 1.29148, with Feb 2’s intraday high of 1.27661 likely in focus below that.