- The British pound gives up gains against its major peers on Tuesday after UK labor market data showed weak job demand.
- Labor demand in the UK remained weak as employers opposed the government’s decision to direct them towards higher NI contributions.
- Traders see the Fed keeping interest rates steady in the next two policy meetings.
The British Pound (GBP) gives up marginal gains against its major peers on Tuesday following United Kingdom (UK) labor market data for the three months ending in November. The Office for National Statistics (ONS) showed job growth remained significantly weak, with a new addition of 35K workers against the previous reading of 173K.
The ILO unemployment rate rose to 4.4%, higher than estimates and the previous publication of 4.3%. Weak job growth clearly shows employers’ discontent with the government’s decision to increase their National Insurance (NI) contribution.
By contrast, wage growth accelerated, with average earnings excluding bonuses rising at a robust 5.6% pace, faster than previous estimates of 5.5% and 5.2%. Average earnings including bonuses also rose 5.6%, as expected, faster than the 5.2% growth in the three months ending in October.
Bank of England (BoE) officials closely follow wage growth data when deciding on interest rates, as wage growth is a major contributor to inflationary pressures in the UK services sector. Technically, stronger-than-expected UK wage growth should have jeopardized recently rising expectations that the BoE will cut interest rates by 25 basis points (bps) to 4.5% at the May 6 policy meeting. of February. However, weak labor demand would offset this.
Pound Sterling PRICE Today
The table below shows the percentage change of the British Pound (GBP) against major currencies today. The British Pound was the strongest currency against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.62% | 0.65% | 0.22% | 0.88% | 0.78% | 0.85% | 0.49% | |
| EUR | -0.62% | 0.03% | -0.36% | 0.25% | 0.16% | 0.23% | -0.13% | |
| GBP | -0.65% | -0.03% | -0.42% | 0.22% | 0.12% | 0.20% | -0.15% | |
| JPY | -0.22% | 0.36% | 0.42% | 0.63% | 0.54% | 0.60% | 0.25% | |
| CAD | -0.88% | -0.25% | -0.22% | -0.63% | -0.09% | -0.03% | -0.38% | |
| AUD | -0.78% | -0.16% | -0.12% | -0.54% | 0.09% | 0.07% | -0.27% | |
| NZD | -0.85% | -0.23% | -0.20% | -0.60% | 0.03% | -0.07% | -0.36% | |
| CHF | -0.49% | 0.13% | 0.15% | -0.25% | 0.38% | 0.27% | 0.36% |
The heat map shows percentage changes for major currencies. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you choose the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change shown in the box will represent the GBP (base)/USD (quote).
What’s moving the market today: Pound weakens against US dollar as Trump maintains tariff hike plan
- The British Pound corrects against the US Dollar (USD) on Tuesday after failing to sustain the recovery move near a 10-day high of 1.2344. The GBP/USD pair falls as the US Dollar (USD) bounces after President Donald Trump confirmed that the proposal for universal tariff increases is still on, but “We are not ready for that yet.”
- A delay in the tariff increase plan has jeopardized the US dollar’s prospects, as market participants anticipated that imposing high tariffs would be one of Trump’s initial decisions soon after returning to the White House. The assumption of higher tariffs also forced traders to raise bets by supporting the Federal Reserve (Fed) to keep interest rates at their current levels for longer.
- Meanwhile, market speculation that the Fed will not announce an interest rate cut decision at the next two monetary policy meetings remains intact. Still, traders are divided over the decision at the May monetary policy meeting. According to the CME’s FedWatch tool, traders see a nearly 50% chance that the Fed will keep interest rates in the current range of 4.25%-4.50% in May.
- On the economic front, investors will pay close attention to preliminary US S&P Global Purchasing Managers’ Index (PMI) data for January, due out on Friday.
Technical Analysis: British Pound falls below 1.2300
The British Pound falls near 1.2275 against the US Dollar on Tuesday after posting a new 10-day high near 1.2345 earlier in the day. The GBP/USD pair bounced but failed to reclaim the 20-day EMA, which is trading around 1.2360.
The 14-day Relative Strength Index (RSI) bounces above 40.00. The bearish momentum would end if the RSI manages to stay above that level.
Looking down, the pair is expected to find support near the October 2023 low at 1.2050. To the upside, the round resistance level of 1.2400 will act as a key resistance.
economic indicator
Change in Employment
The change in employment published by the Office of National Statistics of the United Kingdom represents the change in the number of people who were employed in the United Kingdom in the three months preceding the publication period. Generally, a healthy and steady increase in this figure is positive (or bullish) for the Pound, while a decrease is negative.
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Last post: Tue Jan 21, 2025 07:00
Frequency: Monthly
Current: 35K
Dear: –
Previous: 173K
Fountain: Office for National Statistics
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.
