The GBP/USD pair continued its bullish trend on Monday as investors focused on last Friday’s economic data from the United States. The pair rose to a high of 1.3600, which was about 3.25% above the lowest level in December last year.
US NFP data
The GBP/USD pair rally continued as investors priced in more convergence between the Federal Reserve and the Bank of England (BOE).
On Friday, data by the Bureau of Labor Statistics (BLS) showed that the American labour market continued tightening in December even as the Omicron variant threat remained.
The American non-farm payrolls increased by 199k in December, significantly lower than the median estimates of 422k.
Additionally, the numbers revealed that the US unemployment rate declined to 3.9% in December, which was better than the median estimate of 4.1%. It was also the lowest level it has been since the pandemic started in 2020.
Wages, which were being watched closely in light of the rising consumer inflation, rose by 0.6% on a month-on-month (MoM) basis and by 4.7% on an annualized basis.
These numbers show that the American economy is doing relatively well even as the great resignation continues.
Looking forward, the GBP/USD pair will react to the latest consumer price index (CPI) data that will come out on Wednesday. The number is expected to show that the headline CPI jumped to 7% in December, the highest it has been in decades.
Meanwhile, the GBP/USD has risen simply because analysts see a convergence between the Fed and BOE. The BOE has already started hiking interest rates and analysts expect that it will implement three to four rate hikes this year.
Similarly, the Fed
