The GBP/USD is currently stable around the 1.2850 mark, unaffected by the quiet presence of the US Dollar in Monday’s trading. The market remains cautious, awaiting clear indications of economic direction.
Despite positive job growth reflected in the US Nonfarm Payrolls report for February, disappointing growth in the US Average Hourly Earnings year-on-year highlights wage stagnation across various sectors. Nonetheless, employment gains in various industries hint at a promising economic recovery amidst the pandemic.
Effective strategies fostering wage growth are crucial for comprehensive recovery. Policymakers face the difficult task of promoting job growth whilst mitigating wage stagnation, a challenge that will play out in the foreseeable future.
Market optimism persists amid expectations of the Federal Reserve initiating rate cuts before the Bank of England, potentially narrowing the policy distance between these two financial institutions. However, the Federal Reserve’s next steps will greatly depend on the current global economic situation and are eagerly awaited by investors and financial analysts alike.
UK’s Chancellor of the Exchequer, Jeremy Hunt, has presented a promising Spring Budget according to the Office for Budget Responsibility. The proposed measures aim to enhance economic growth and mitigate the impacts of Brexit, sparking an optimistic outlook among stakeholders and receiving praise from financial analysts.
Finally, anticipation builds for the release of the UK’s employment data, including the ILO (3M) and Employment Change, due next Tuesday. The February Consumer Price Index data, indicating inflation, is also of keen interest, indicating a busy week of trading ahead.
