- GBP / USD has remained supported above 1.3500 but failed to rally around 1.3550 as traders await the key US jobs report on Friday.
- So far, the dollar has failed to see widespread strength in the wake of the latest Fed Minutes.
- USD bulls may be waiting for the report to confirm progress towards the Fed’s full employment target before chasing the USD higher.
The GBP/USD continues to trade defensive on Thursday as the US session gets underway, despite a weaker-than-expected December US ISM services PMI survey, failing to recover above 1.3550 . It is currently trading at 1.3525 down 0.2% or 30 pips on the day, and roughly 0.5% below the Fed’s pre-Minute highs at 1.3600. Some currency strategists are surprised that the dollar has not strengthened further in the wake of the latest Fed Minutes, having been surprised by the apparent appetite among FOMC members for a faster rate of decline (using rate hikes and tightening quantitative).
It’s probably worth noting that even if the dollar starts to rally in the coming sessions, the pound is likely to hold up better than other G10 currencies, given that the Bank of England already is and will stay well ahead of the Fed. Regarding currency policy normalization (both in terms of rate hikes and expectations of an imminent QT). However, for now, GBP / USD is still well supported above the 1.3500 level, having passed a test earlier in the session.
Technical levels
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