British Pound (GBP/USD) Reverses Sharply Higher After US Jobs Data

 

GBP/USD gathered bullish momentum and climbed to a fresh 10-day high above 1.2220 on Thursday. The pair lost its traction early Friday and went into a consolidation phase at around 1.2200, with investors' attention shifting to the US data releases. 

The Bank of England (BoE) left the policy rate unchanged at 5.25% with a 6-3 vote after the November policy meeting. The BoE adopted a cautious tone regarding further policy tightening but noted that risks to inflation projections were skewed to the upside, given the uncertainty created by the events in the Middle East. Although the BoE event failed to impact Pound Sterling's valuation in a significant way, the broad-based US Dollar (USD) weakness allowed GBP/USD to push higher on Thursday.

Later in the day, BoE Monetary Policy Committee (MPC) Member Jonathan Haskel will deliver a speech. Haskel voted in favor of a 25 basis points rate hike and his hawkish comments could support Pound Sterling.

In the early American session, the October jobs report from the US will be watched closely by market participants. Nonfarm Payrolls (NFP) are forecast to rise by 180,000. Fed Chairman Jerome Powell pointed to tight labor market conditions as one of the factors that could allow them to raise the policy rate again this year.

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