Ella 
During Monday’s Asian session, the GBP/USD rose above the mid-1.2100 level. A weak US dollar provided some support for the GBP/USD. Risk sentiment dominated the markets ahead of Tuesday’s important UK employment and US retail sales data. The GBP/USD is currently trading around the 1.2160 level, up 0.15% on the day.
The latest data on Monday showed that the UK’s Rightmove house price index rose 0.5% on a monthly basis in October, compared to a 0.4% increase in the previous month. The UK Rightmove house price index recorded an annual rate of -0.8% in October, compared to -0.4% in the previous month.
Bank of England (BOE) Governor Andrew Bailey, speaking at an International Monetary Fund meeting in Morocco over the weekend, noted that rising borrowing costs were affecting the housing market and employment. He said that interest rates are likely to be kept at around 5.25% for now because of the restrictive policy needed to get inflation back to 2%.
In the United States, investors expect the Federal Reserve (Fed) to raise interest rates before the end of the year due to rising inflation expectations and better inflation data last week. The University of Michigan’s one-year inflation expectations gauge rose to 3.8% from 3.2%, and the five-year inflation expectations gauge jumped to 3% from 2.8%. At the same time, the Michigan Consumer Confidence Index data released on Friday fell to 63.0 from the previous reading of 68.1, which was lower than the expected reading of 67.4.
The U.S. Consumer Price Index (CPI) for September was 3.7% on an annual basis and 0.4% on a monthly basis. However, dovish comments from Fed officials may give bullish traders reason to be aggressive.
Looking ahead to Tuesday, market participants will be closely watching the UK’s employment data. The UK’s ILO Employment Change for the three months ending August is expected to come in at -195,000 from the previous month.
