GBP/USD has faced challenges in maintaining upward momentum after briefly surpassing the 1.2300 mark. Investors' attention now shifts to the upcoming US labor market data, which is anticipated to provide fresh directives for the currency pair. The Nonfarm Payrolls (NFP), a key indicator for the US labor market, is expected to rise by 160,000 in December. This report, released on the first Friday of each month, will also include wage inflation figures.
The currency pair remains susceptible to persistent strength in the US Dollar, fueled by expectations of hawkish Federal Reserve policies and the economic strategies proposed by US President-elect Trump. The valuation of the US Dollar may significantly depend on the labor market conditions presented in the upcoming report. Furthermore, the UK bond market turmoil adds additional pressure on GBP/USD, complicating its recovery.
The details of the jobs report could have implications for the Federal Reserve's policy easing anticipated in 2025. Thus, market participants are closely monitoring these developments. The publication of these figures could potentially alter expectations and influence investor sentiment.
Meanwhile, EUR/USD trades within a narrow channel around 1.0300 during the European session, as market participants await clearer signals from the US labor data. Concurrently, gold prices (XAU/USD) have gained positive traction for the fourth consecutive day, highlighting a divergence in market sentiment.
It is important to note that the author and FXStreet are not registered investment advisors, and this article is not intended as investment advice. Investors should conduct their own research and analysis before making any financial decisions.