GBPUSD is recovering from two and a half year highs

Last Updated on January 28, 2021

GBP/USD Outlook: 28th January 2021

GBPUSD fell against many top currencies during trading on Wednesday in the European market, retracing from its highs in two and a half years, due to the activity of corrections and profit-taking, as markets awaited the Federal Reserve decisions that will be issued later in the day.

GBPUSD traded at $ 1.3720, down by more than 0.1%, from today’s opening session at $ 1.3735, after achieving its highest levels in two and a half years at $ 1.3758.

Chart of GBP/USD - 28th January 2021

The job numbers are relatively strong in the UK

The British Pound rallied yesterday following the announcement of the relatively strong UK job numbers, data showed that the overall unemployment rate in the UK rose from 4.9% in October to 5.0% in November, this number was better than the average estimate of 5.1%, as well. Better than the EU average of 7.6%.

In the same month, the average income without bonus increased by 3.6% from the previous 2.8%, with bonuses included. Wages increased by 3.6%, as more companies increased their wages to meet the needs of their workers, and at the same time, the number of people who filed for unemployment increased. By just 7.0% during the month of December, which is better than the forecast of 35,000.

Although Britain’s deaths from the coronavirus pandemic exceeded 100,000 on Tuesday, the faster initial vaccine rollout has boosted hopes for an economic recovery.

With Britain leaving the European Union at the start of the year, experts said the capital’s loss of some financial business due to Brexit was not catastrophic and would flourish even if the EU blocks access “unreasonably”.

GBPUSD is declining ahead of the Federal Reserve’s decisions

The dollar index rose 0.1% to trade at 90.284 points, after a 0.2% decline in the previous session.

Expectations indicate that Federal Reserve Chairman Jerome Powell will renew his commitment to the too-easy policy. Earlier this month, Powell said that the US economy is still far from the bank’s inflation and employment targets and it is too early to discuss changing monthly bond purchases.

Professional Trader and Analyst, economist in Financial and Forex marketsince 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.
Mohammed Abdelkhalik

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