The British Pound heads into a new trading week close to one-month highs against the United States Dollar, a tale that’s much more about the former than the latter.
That prognosis at least was bolstered on May 3 by the release of official labor market data out of the US. April’s rise in new nonfarm jobs missed forecasts substantially, while the unemployment rate ticked up. It’s too soon to tell if this is a minor blip in what has been a strong data series, or something more serious.
Given that it’s perhaps hard to see why GBP/USD should remain quite as elevated as it does. It certainly remains far closer to the last eighteen months’ peaks than to their lows. Some of this is accounted for by a general revival in risk appetite. However, most of it must be down to the fact that the markets are now far from sure that UK rates will be falling much faster than those in the US.
Despite a couple of weeks’ gains, the Pound looks by no means overbought at current levels and, while strong long-term gains look unlikely, there does appear to be a little bullish momentum behind the Pound now.Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances. Forex trading involves risk.
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