The GBP/USD at the mercy of US economic data

As abovementioned, risk sentiment is a mixed bag. The UK economic calendar will reveal the Gross Domestic Product (GDP) on Friday, ahead of the Bank of England’s (BoE) March 23 meeting. The US economic docket will feature Factory Orders for January, foreseen to fall to -1.8%, below the prior’s month reading of 1.8%.

The greenback (USD) is printing losses, capping the GBP/USD’s fall below the 1.2000 figure. The US Dollar Index (DXY), a gauge of the buck’s value vs. a basket of six currencies, extended its losses, by 0.14%, at 104.380. Meanwhile, US Treasury bond yields, which underpinned the USD last week’s price action, are down, with the 10-year benchmark note rate below 4%, at 3.950%.

The week could be volatile due to US Federal Reserve (Fed) Chairman Jerome Powell’s appearance at the US Congress on March 7 and 8. Analysts expect Powell to maintain a hawkish stance, echoing some of his colleague’s tone. He’s expected to reiterate that interest rates must go higher for longer if the US economy continues to print solid data.

Following astonishing January data, the US Nonfarm Payrolls figures are awaited on Friday. Market participants estimate the US economy added 200K jobs to the economy. Any figures below expectations would weigh on the USD, meaning the GBP/USD could appreciate. On the flip side, stronger data would warrant further tightening by the Fed.