Pound Rises After U.K. Labor Data
15 October 2024 - 5:00PM
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The British pound strengthened against most major currencies in
the European session on Tuesday, after data showed that the
nation's unemployment rate fell slightly in three months to August,
while it was forecast to remain unchanged.
Data from the Office for National Statistics showed that the
U.K. unemployment rate fell slightly to 4.0 percent in three months
to August, while it was forecast to remain unchanged at 4.1
percent.
Payroll employment decreased 15,000 from the prior month to 30.3
million in September.
U.K. wage growth softened to the lowest in more than two years
in the three months to August, adding support to expectations that
the central bank will cut interest rates further at the next
meeting.
In the three months to August, average earnings excluding bonus
increased 4.9 percent from the previous year, slower than the 5.1
percent increase in the three months to July.
This was the slowest rise since June 2022 and also matched
expectations.
European stocks traded higher amid investor optimism about
corporate earnings.
After beats by JP Morgan and Wells Fargo, the focus now shifts
to earnings from Bank of America, Citigroup, Goldman Sachs, Johnson
& Johnson, UnitedHealth and Walgreens later in the day.
Thursday's ECB meeting also remains on investors' radar, with
the central bank likely to deliver another interest rate cut after
recent data signaled continued weakness in the euro zone
economy.
In the European trading today, the pound rose to nearly a 2-week
high of 0.8336 against the euro and a 5-day high of 1.3087 against
the U.S. dollar, from early lows of 0.8352 and 1.3035,
respectively. If the pound extends its uptrend, it is likely to
find resistance around 0.81 against the euro and 1.34 against the
greenback.
Against the Swiss franc, the pound edged up to 1.1276 from an
early low of 1.1248. The pound may test resistance around the 1.13
region.
Meanwhile, the pound dropped to 194.67 against the yen, from an
early high of 195.68. The next possible downside support for the
pound is seen around the 192.00 region.
Looking ahead, Canada CPI data for September, U.S. NY Empire
State manufacturing index for October, U.S. Redbook report and U.S.
consumer inflation expectations for September are set to be
released in the New York session.
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