Pound Sterling revisits weekly low against US Dollar ahead of US NFP data

The Pound Sterling declines for the fourth straight day against the US Dollar.
The Greenback trades firmly ahead of the US NFP data release for December.
Investors await UK employment figures for fresh cues on the BoE’s monetary policy outline

The Pound Sterling (GBP) trades near its weekly low around 1.3420 against the US Dollar (USD) during the European trading session on Friday. The GBP/USD pair is under pressure as the US Dollar rallies further ahead of the United States (US) Nonfarm Payrolls (NFP) data for December, which will be published at 13:30 GMT.

During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.17% higher near 99.00, the highest level seen in four weeks.

Investors will pay close attention to US official employment data to get fresh cues on the Federal Reserve’s (Fed) monetary policy outlook. Also, the significance of the December NFP report is higher as numbers from previous months were distorted due to the historically longest government shutdown.

According to estimates, the US economy created 60K fresh jobs in December, slightly lower than 64K in November. The Unemployment Rate dropped to 4.5% from the prior reading of 4.6%. Signs of soft job demand would boost Fed dovish expectations, while the negative impact of upbeat data would be limited on them, as one-time good figures would be insufficient to dramatically ease policymakers’ concerns over the labor market.

Markets will also focus on Average Hourly Earnings figures for new insights about inflation. This key measure of wage growth is expected to have grown at a faster pace of 3.6% year-on-year (YoY) in December against 3.5% the previous month. On a monthly basis, the wage growth measure is estimated to have risen at a faster pace of 0.3% against the prior reading of 0.1%.