The GBP/USD currency pair has been subjected to some mild selling pressure. It has since been trading under 1.3300 as the market waits with bated breath for the US Nonfarm Payroll (NFP) report to drop. As trading progressed during the Asian hours on Friday, the currency pair continued to slide lower, approaching 1.3275 in response to changing investor tone.
Traders and investors alike are preparing for the week’s most important inflation data, the employment numbers. At the same time, the US dollar is receiving a boost from optimistic signals on US-China trade talks. These negotiations have increased optimism in the US economy, helping to fuel a strong dollar showing against its British rival.
The US April employment report will be closely monitored by market participants. With the release of this report, some of those important metrics like Nonfarm Payrolls, the Unemployment Rate, Average Hourly Earnings come into play. These indicators will provide a better picture of the health of the US labor market. That’s not all; they might influence decision making on monetary policy in the short term too.
GBP/USD has been recently trading below 1.3300, with the current quote as of Friday morning at around 1.3275. This drop is a sign of skittishness among investors as they wait for the US jobs numbers to come in.
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As such, the next NFP report is of extreme significance. More importantly, it usually drives market expectations around the direction of Federal Reserve policy. If the jobs report comes in strongly, it might just push the US dollar even higher. Disappointing numbers could trigger significant currency market turbulence.
The general mood in currency markets is still very nervous. Investors are still parsing through what the new employment data might mean. They’re monitoring, too, the constant stream of ongoing trade negotiations that could shape economic forecasts for the U.S. and U.K. alike.