The GBP/USD pair continues to decline to around 1.34750 during Wednesday's Asian trading session. The pound sterling (GBP) is weakening against the US dollar (USD) due to a weaker UK employment report. Later on Wednesday, attention will shift to the US Consumer Price Index (CPI) for May.
The ILO unemployment rate in the UK rose to 4.6% in the three months to April from 4.5% previously, the British Office for National Statistics said on Tuesday. The figure was in line with expectations. Meanwhile, the change in the number of applicants for unemployment benefits in May was 33,100, compared with -21,200 previously (revised from 5,200), which is below the consensus of 9,500.
In addition, average earnings excluding bonuses in the UK rose 5.2% year-on-year (3M YoY) in April, compared with a revised 5.5% increase in the previous reading. The market forecast was 5.4%. Average earnings including bonuses rose 5.3% over the same period after accelerating to a revised 5.6% in the quarter to March. The data fell short of the forecast of 5.5%.
These figures indicate that the UK labor market is losing momentum under pressure from tax increases and the minimum wage hike by the government. This, in turn, may put some pressure on the pound sterling in the near term. “This gradual slowdown in wage growth may reassure the Bank of England after inflation unexpectedly jumped to its highest level in more than a year last month,” said Paige Tao, an economist at PwC UK.
Trading recommendation: SELL 1.34800, SL 1.35100, TP 1.34100
The ILO unemployment rate in the UK rose to 4.6% in the three months to April from 4.5% previously, the British Office for National Statistics said on Tuesday. The figure was in line with expectations. Meanwhile, the change in the number of applicants for unemployment benefits in May was 33,100, compared with -21,200 previously (revised from 5,200), which is below the consensus of 9,500.
In addition, average earnings excluding bonuses in the UK rose 5.2% year-on-year (3M YoY) in April, compared with a revised 5.5% increase in the previous reading. The market forecast was 5.4%. Average earnings including bonuses rose 5.3% over the same period after accelerating to a revised 5.6% in the quarter to March. The data fell short of the forecast of 5.5%.
These figures indicate that the UK labor market is losing momentum under pressure from tax increases and the minimum wage hike by the government. This, in turn, may put some pressure on the pound sterling in the near term. “This gradual slowdown in wage growth may reassure the Bank of England after inflation unexpectedly jumped to its highest level in more than a year last month,” said Paige Tao, an economist at PwC UK.
Trading recommendation: SELL 1.34800, SL 1.35100, TP 1.34100
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More analytical information and promotions on FreshForex website cutt.ly/mw3aPjui
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.