- GBP/USD defends Friday’s run-up towards crucial resistance, remains sidelined of late.
- Make UK, PwC survey cites UK manufacturers’ optimism for 2022.
- Virus woes stay on the table despite easing infections as death toll crosses 150,000.
- EU ‘not impressed’ as UK’s Truss shows readiness to trigger Article 16.
GBP/USD buyers struggle for clear directions as the cable pair takes rounds to 1.3590 during Monday’s Asian session, following the strongest daily run-up in over a week.
The cable pair’s latest inaction could be linked to the contrasting signals by the key risk catalysts as well as an absence of the major data/events during the generally tepid Asian session.
The US Dollar Index (DXY) portrayed the biggest daily loss in six weeks after the December month jobs report failed to impress Fed hawks. That said, the headline Nonfarm Payrolls (NFP) disappointed markets with 199K figures for December versus 400K forecasts and 249K prior (upwardly revised from 210K). However, the Unemployment Rate dropped to 3.9% compared to 4.1% market consensus and 4.2% in November while the U6 Underemployment Rate that fell to 7.3% against November’s downwardly revised 7.7%, both closing in the pre-pandemic levels.
It should be noted, however, that an NFP-led disappointment was largely overruled by the Unemployment Rate and U6 Underemployment Rate, which in turn seems to challenge the market sentiment of late.
While portraying the same, S&P 500 Futures drop 0.20% intraday while the Antipodeans and commodities remain pressured by the press time.
Elsewhere, the latest reduction in the UK’s covid cases and death toll, recently around 147,472 and 97 in that order, fails to renew market optimism as the virus-led death numbers crossed 150,000. Following the news, UK PM Boris Johnson said the covid has “taken a terrible toll on our country” while pushing for vaccination and thanking the National Health Service (NHS).
It’s worth noting that the Brexit front flashed another negative signal as the UK’s newly appointed Brexit Minister Liz Truss wrote to Telegraph on Saturday, “insisted she was ‘willing’ to use the ‘legitimate provision’ should a ‘negotiated solution’ not be reached on the Northern Ireland Protocol,” per the Daily Express. “Joao Vale de Almeida, the EU’s ambassador to the UK, said it was unhelpful to ‘keep agitating the issue’, noting the bloc was not surprised by the threat but ‘we are not too impressed,’” adds the news.
On a positive side, the British manufacturers remain optimistic per the latest survey details of the UK think tank and PwC. “Trade body Make UK and accountants PwC said 73% of manufacturers believed conditions for the sector would improve and 78% foresaw at least a moderate increase in productivity in 2022,” said Reuters.
Looking forward, a light calendar at home and an absence of Japanese traders could restrict GBP/USD moves in Asia, as well as early Europe. However, the cable pair’s recent recovery may persist should the greenback fails to recovery Friday’s losses.
A clear upside break of the 100-DMA, surrounding 1.3555 by the press time, keeps GBP/USD buyers hopeful to overcome the 1.3600-10 resistance zone established since October 2021.