The British Pound (GBP) rallied — briefly — in response to this morning’s UK labour market data. Unemployment unexpectedly fell in June, dropping to 4.2% (versus an expected rise to 4.5%, from 4.4% in May).
A break above 1.2850/00 is possible
“Wages data was broadly in line with forecasts. Average weekly earnings declined to 4.5% in the June quarter from a year ago (from 5.7%), slightly lower than expected, while non-bonus pay remains relatively elevated, gaining 5.4% in the period (down from a revised 5.8% in May).”
“Cable has given back all the gains made on the data at the time of writing, but a BoE rate cut in September remains unlikely (swaps are pricing in an 8-9 basis point easing risk). BoE Governor Mann commented in the FT on Monday that wage growth remained a concern for inflation. Mann voted to hold rates at the policy meeting earlier this month when the MPC narrowly voted for a cut.”
“GBP easily gave back earlier gains, but the broader technical tone for Cable remains positive following the development of the aforementioned bullish reversal on the test of the 200-day moving average (1.2667) last week. Corrective gains are stalling around retracement resistance at 1.2810, but a move through the low 1.28s should see Cable advance to test 1.2850/00.”
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.
