GBPUSD clings to gains near daily high amid broad-based USD weakness, NFP awaited – by hareshmenghani GBPUSD NFP Fed BOE Currencies
A positive risk tone is seen weighing on the safe-haven USD and lending support to the pair.A more hawkish stance by the Fed to limit the USD losses and cap the pair ahead of the NFP.stages a goodish recovery from a two-week low, around the 1.1150 area touched earlier this Friday and maintains its bid tone through the first half of the European session. Currently placed just below mid-1.
A generally positive tone around the equity markets turns out to be a key factor exerting some downward pressure on the safe-haven greenback. That said, elevated US Treasury bond yields, bolstered by the prospects for a further policy tightening by the Federal Reserve, should help limit the downside for the USD. In fact, Fed Chairdownplayed expectations for a dovish pivot and said on Wednesday that it was premature to discuss a pause in the rate-hiking cycle.
Apart from this, the Bank of England's gloomy outlook for the UK economy should act as a headwind for the British Pound and contribute to capping the GBPUSD pair. It is worth recalling that the UK central bank forecasts a recession to last for all of 2023 and the first half of 2024. The BoE on Thursday also indicated a lower terminal peak than is currently priced into markets.
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