GBP/USD sees an upside above 1.1700 ahead of UK employment and US Inflation data
- GBP/USD is expected to display more upside if it oversteps the immediate hurdle of 1.1700.
- UK’s jobless rate is seen unchanged while the earnings data will escalate to 5%.
- Lower consensus for US inflation has weakened the mighty DXY.
The GBP/USD pair is hovering around the immediate hurdle of 1.1700 in the Tokyo session. The asset is trying harder to overstep 1.1700 from Monday. It seems that the inventory accumulation process will conclude sooner and the cable will display a sheer upside ahead. It would be worthy to dictate that investors are awaiting the release of the UK employment and US inflation data to execute informed decisions.
Taking into account the market estimates, the UK Office for National Statistics will report the jobless rate at 3.8%, similar to its previous close. The Claimant Count Change that indicates the number of individuals applying for jobless benefits will reduce by 9.2k. Lower-than-expected jobless claims and jobless rate data will strengthen the pound bulls.
The catalyst which is critical for the pound bulls is the Average Hourly Earnings data. The labor cost index has remained vulnerable in the previous months and households have been a major victim of subdued earnings. Higher forced payouts for households due to a double-digit inflation rate need inflation-adjusted earnings to offset the former. Therefore, the catalyst will be keenly watched. As per the consensus, the economic data is seen significantly higher at 5% vs. 4.7% in the prior release
Meanwhile, the US dollar index (DXY) has displayed a less-confident pullback after printing a low of 107.83 on Monday. The DXY is expected to display more weakness if it surrenders the critical support of 108.00. The mighty DXY is sensing offers amid lower consensus for the US Consumer Price Index (CPI) data. Falling gasoline prices and soaring interest rates have trimmed the estimates for the headline CPI to 8.1%. A decline in inflation data will compel the Federal Reserve (Fed) to trim the pace of hiking interest rates.