- GBP/USD remains subdued following the release of mixed UK employment data on Tuesday.
- The UK ILO (3M) unemployment rate (Aug) fell to 4.0%, from July’s reading of 4.1%.
- The Fed’s Kashkari reiterated the central bank’s data-dependent approach, highlighting continued easing inflationary pressures alongside a strong labor market.
GBP/USD pulls back after posting gains in the previous two sessions, trading around 1.3040 during Asian trading hours on Tuesday. The pair remains subdued following the release of mixed UK employment data.
The UK’s ILO unemployment rate fell to 4.0% in the three months to August, down from a reading of 4.1% in July and below the market forecast of 4.1%. The change in employment in August showed an increase of 373,000, compared to 265,000 in July. Meanwhile, average earnings excluding bonuses rose 4.9% year-on-year in the three months to August, in line with expectations, although slightly below the 5.1% growth recorded in July.
The US Dollar (USD) gains support from rising expectations that the US Federal Reserve (Fed) will avoid aggressive interest rate cuts, following a strong jobs report and concerns about persistent US inflation. According to CME’s FedWatch tool, markets are currently pricing in an 88.2% probability of a 25 basis point rate cut in November, without anticipating a reduction greater than 50 basis points.
On Monday, Minneapolis Federal Reserve Bank (Fed) President Neel Kashkari reaffirmed the Fed’s data-dependent approach. Kashkari reiterated the familiar views of Fed policymakers on the strength of the US economy, pointing to continued decline in inflationary pressures and a robust labor market, despite a recent rise in the overall unemployment rate, according to Reuters.
economic indicator
ILO unemployment rate
The ILO unemployment rate published by the National Statistics corresponds to the percentage of unemployed within the universe of the active population. This is a key indicator for the British economy. When this rate rises, it indicates a containment in the United Kingdom’s expansion in the European Union labor market. As a result, the growth of this rate leads to a weakening of the British economy.
Last post:
Tue Oct 15, 2024 06:00
Frequency:
Monthly
Current:
4%
Dear:
4.1%
Previous:
4.1%
Fountain:
Office for National Statistics
The unemployment rate is the broadest indicator of the British labor market. The figure is highlighted by the media, beyond the financial sector, giving the publication a more significant impact despite its late publication. It is published about six weeks after the end of the month. While the Bank of England is tasked with maintaining price stability, there is a substantial inverse correlation between unemployment and inflation. A higher than expected figure tends to be bearish for the GBP.
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.
