- The GBP/USD pair moved closer to 1.50% after the disappointing ISM services data from the US.
- Aggressively, the Fed’s statements failed to sway GBP/USD.
- UK GDP and US CPI will be released next week.
The pound sterling (GBP) extended its gains against the US dollar (USD), rising more than 160 points on Friday, following a disappointing report from ISM Services and an earlier jobs report. The GBP/USD pair is trading at 1.2077.
The US ISM services index fell and weakened the USD
The GBP/USD pair rallied again over 100 points after the US Non-Farm Payrolls release. Later, the Institute for Supply Management (ISM) revealed the services PMI index, which contracted to 49.6 against forecasts of 55 and fell behind November’s jump of 56.5. It must be said that this is the lowest reading since May 2020, and traders should note that PMI readings below 50 indicate contraction.
Earlier, the US Department of Labor revealed that the US economy added more jobs than expected and the Unemployment Rate fell. He reported that wage inflation is declining, to 4.6% yoy, below estimates of 5.0%.
GBP/USD extended its gains, above 1.2050, after the ISM Services PMI headline is released. The dollar index, which measures the value of the US dollar against a basket of currencies, plunged more than 1% to fall as low as 104,000.
Meanwhile, fresh Fed statements failed to prop up the US dollar, as Federal Reserve Governor Lisa D. Cooks claimed inflation is “too high” and “very concerning” despite the latest reports. . For his part, the president of the Richmond Fed, Thomas Barkin, affirmed that the Fed remains determined regarding inflation and that it must remain vigilant until inflation returns “sustainably” to the 2% target. He added that taking a more gradual approach to interest rate paths should limit the damage to the US economy.
In the UK, Retail Sales, Gross Domestic Product and Trade Balance will be released next week. In the United States, the Consumer Price Index (CPI), the applications for unemployment benefits and the Consumer Sentiment of the University of Michigan will be published.
GBP/USD Key Technical Levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
