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GBPUSD extended its gains to trade above $ 1.42
GBPUSD rose during trading today, Wednesday, in the European market, and recorded its fifth daily gain in a row, recording its highest level in three years, to trade above the price of $ 1.42. These broad gains come in light of the continued decline of the US dollar against many Of the currencies, in addition to the increasing hopes for the recovery of the British economy at a faster rate than expected thanks to the British government’s progress in the vaccination program compared to the major economic countries, which would reduce the restrictions of the closure quickly.
The GBPUSD traded at $ 1.4238, the highest since April 2018, up by 0.9% from today’s opening price of $ 1.4111.
GBPUSD is rising on the heels of the UK employment report
The GBPUSD pair has been in a strong upward trend since March of last year when it fell to its lowest level in several years at $ 1.1415. This strong performance is mostly due to the general weakness of the US dollar, the recent Brexit agreement, in addition to the progress the country has made. In the vaccination program, I have already vaccinated more than 15 million people.
In a report released yesterday, the Office for National Statistics (ONS) said that the country’s unemployment rate rose from 5.0% in November to 5.1% in December, but is relatively better than that of comparable countries such as the United States and the European Union average.
Meanwhile, wages without bonuses rose 4.1% in December from 3.6% the previous month, with bonuses wages rising from 3.7% to 4.7% as employers motivated their employees amid the pandemic. Most of the wage increase has been in the retail industry.
Other data revealed that the number of people who applied for benefits in January decreased by 20,000, marking the second consecutive monthly decline, while expectations indicated an increase of 35,000 applications due to the epidemic.
However, analysts believe that the situation may worsen in the coming months as the government suspends the leave program, as these numbers give a rough idea of the extent to which unemployment can arise when job support dwindles. The unemployment rate is expected to rise to around 6-6.5% during Mid-year and potentially higher if wage subsidies are removed somewhat suddenly in the second quarter.
The US dollar is declining after Powell’s testimony
The US dollar index formed a bearish curve after the testimony of Federal Reserve Chairman Jerome Powell and is trading at 90.08 points, which is 1% less than the February high of 91.05 points.
On the first day of his testimony before a Senate committee, Powell said that the economy is going through an uneven recovery, and as a result, he said the country will need more financial and monetary support, as the economy is far from inflation and employment targets and will likely need some time to make further progress.
Professional Trader and Analyst, economist in Financial and Forex market since 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.