- The GBP/JPY moves up around 189.00 after the optimistic data of the United Kingdom labor market for the three months that end in February
- The growing commercial war between the US and China has fogged global economic perspectives.
- Ryosei Akazawa of Japan has a visit to the US for commercial conversations.
The GBP/JPY torque rises about 189.00 in the European session on Tuesday. The pair moves up as the sterling pound (GBP) is strengthened after the publication of the optimistic Employment data of the United Kingdom (UK) for the three months that end in February.
The United Kingdom National Statistics Office (ONS) reported that employers hired 206K employment search engines, significantly more than the addition of 144K observed in the quarter that ended in January. The ILO unemployment rate remained stable at 4.4%, as expected.
The average gains excluding bonuses, a key measure of salary growth, increased 5.9%, below 6%estimates. In the three months that ended in January, the salary growth measure increased by 5.8%. Theoretically, persistent salary growth and robust employment growth block the path so that the Bank of England (BOE) supports a relief of monetary policy. However, the participants of the financial market are concerned about the economic and labor market of the United Kingdom.
The intensification of the tariff war between the United States (USA) and China is expected to impact global economic growth, assuming that the latter will look for other markets to sell its products.
Meanwhile, an increase in employers’ contributions to the National Insurance (NI) from 13.8% to 15%, as Treasury Chancellor Rachel Reeves announced in the Autumn Budget, has entered into force this month. This could force employers to reduce their talent requirements to compensate for the impact of greater payment towards social security schemes.
In the Asia-Pacific region, investors expect commercial conversations between Washington and Japan, with Japanese Minister of Economy Ryosei Akazawa scheduled to visit USA. Before visiting, Akazawa said Monday: “Our goal is the complete elimination of additional US tariffs”. He warned that Trump’s tariffs are already eroding the profits of Japanese companies day by day.
GDP FAQS
The gross domestic product (GDP) of a country measures the growth rate of its economy for a certain period of time, normally a quarter. The most reliable figures are those that compare GDP with the previous quarter (for example, the second quarter of 2023 with the first of 2023) or with the same period of the previous year (for example, the second quarter of 2023 with the second of 2022).
The annualized quarterly figures of GDP extrapolate the growth rate of the quarter as if it were constant for the rest of the year. However, they can be misleading if temporary disturbances affect growth in a quarter but it is unlikely that they last all year, as happened in the first quarter of 2020 with the burst of the coronavirus pandemic, when the growth collapsed.
A higher GDP result is usually positive for the currency of a nation, since it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting greater foreign investment. Similarly, when GDP falls it is usually negative for the currency.
When an economy grows, people tend to spend more, which causes inflation. The Central Bank of the country then has to raise interest rates to combat inflation, with the side effect of attracting more world investor capital tickets, which helps the appreciation of the local currency.
When an economy grows and GDP increases, people tend to spend more, which causes inflation. Then, the country’s central bank has to raise interest rates to combat inflation. Higher interest rates are negative for gold because they increase the opportunity cost to keep gold in the face of placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for the price of gold.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
