- Sterling gains ground, capitalizing on a softened dollar following lackluster US employment data.
- Despite Federal Reserve Chairman Powell’s receptiveness to potential policy adjustments, the surge in Initial Jobless Claims to 217K highlights a diminishing US labor market momentum.
- The British pound receives a boost as Chancellor Hunt unveils sanguine forecasts for the UK’s economic growth in 2024 and 2025.
During Thursday’s North American session, the Pound Sterling made modest gains, while the Greenback continued to face pressure following a tepid jobs report from the United States. As a result, the GBP/USD is trading at 1.2756, reflecting a 0.19% increase.
GBP/USD edges up on weak US economic data
The US Dollar continues to struggle as recent economic data fails to provide support, with Federal Reserve Chair Jerome Powell’s Wednesday speech failing to instill confidence. Although Powell did not express a dovish stance explicitly, he did mention the possibility of policy easing later in the year, contingent on data trends. Powell is set to address the audience again on Thursday around 15:00 GMT.
Meanwhile, signs of a cooling labor market emerge, as Initial Jobless Claims for the week ending March 2 reached 217K, surpassing both estimates and the previous reading of 215K. This data aligns with Wednesday’s US Job Openings and Labor Turnover Survey (JOLTS), indicating 8.863 million job openings—below expectations and a decrease from December’s 8.889 million.
Additional figures indicate a modest improvement in private hiring, with an increase of 140K jobs, falling slightly short of the forecasted 150K. Looking ahead, the US Department of Labor is scheduled to release the Nonfarm Payrolls for February on Friday, expected to show a rise of 200K jobs, a decrease from January’s 353K.
On the other side of the Atlantic, UK Chancellor of the Exchequer Jeremy Hunt unveiled the spring budget to the House of Commons. Hunt projects the UK economy to grow by 0.8% in 2024 and 1.9% in 2025, surpassing the Office for Budget Responsibility’s (OBR) November forecasts of 0.7% and 1.4%, respectively.
GBP/USD Price Analysis: Technical outlook
The GBP/USD continued its upward momentum in the wake of Powell’s speech and US economic data, as buyers set their sights on the 1.2800 level. Notably, the Relative Strength Index (RSI) signals a bullish trend without entering overbought territory, suggesting that the rally is sustainable. Beyond 1.2800, the subsequent resistance levels include the psychological barrier at 1.2850 and the 1.2900 mark. Conversely, if sellers manage to pull the exchange rate below the March 6 high of 1.2761, it could pave the way for a correction. The subsequent support levels would be today’s low at 1.2722, followed by the key 1.2700 level.
