Introduction:
The GBP/USD currency pair fell on Monday, March 13, 2023, after a four-day winning streak, reaching a one-month high of 1.4200. The decline came as the US dollar regained strength due to a rise in US bond yields. Meanwhile, the mixed UK jobs data failed to provide any impetus to the major. Traders were also eagerly awaiting the release of the US Consumer Price Index (CPI) report, which could have significant implications for the US dollar and global markets.
US Bond Yields Revive USD Demand:
A goodish pickup in the US bond yields was the primary driver behind the resurgence of the US dollar. As bond yields rise, so does the attractiveness of US dollar-denominated assets. This demand for US assets leads to a stronger US dollar, which can have implications for global trade and investment.
Mixed UK Jobs Data Fails to Impress:
The mixed UK jobs data failed to impress the GBP bulls or provide any impetus to the major. The UK’s unemployment rate fell to 3.9%, the lowest level in over a decade. However, the number of people claiming unemployment benefits rose more than expected, indicating ongoing labor market weakness. Additionally, average weekly earnings increased by 5.9% in the three months to January, which was slightly below expectations.
Awaiting the US CPI Report:
Traders were eagerly awaiting the release of the US CPI report, which could have significant implications for the US dollar and global markets. The CPI measures the change in the price of goods and services over time, and it is one of the most closely watched economic indicators. If the CPI comes in higher than expected, it could lead to speculation of an earlier-than-expected rate hike by the US Federal Reserve. This speculation could drive up the value of the US dollar, as investors seek higher returns on their investments.
Conclusion:
The GBP/USD currency pair fell on Monday, March 13, 2023, after a four-day winning streak. The resurgence of the US dollar was due to a rise in US bond yields, while mixed UK jobs data failed to impress the GBP bulls. Traders were eagerly awaiting the release of the US CPI report, which could have significant implications for the US dollar and global markets. The ongoing volatility in currency markets highlights the importance of staying up-to-date on economic indicators and global events that can impact exchange rates.
