.png)
UK Jobless Rate Falls
The British Pound is rallying today on the back of the latest UK economic data this morning. The jobless rate was seen falling back to 4.2% from 4.4% prior, marking a 2 and a half year low, well below the 4.5% the market was looking for. The data follows positive GDP and retail sales data recently, adding to a better outlook for the UK economy. Alongside the unemployment rate, wage growth was seen falling sharply to 4.5% from 5.7% last, below the 4.6% the market was looking for. With wages falling and the jobs market growing tighter, the consensus now is for the BOE to hold rates steady through September before cutting further in November.
BOE Easing Expectations
Following the BOE rate cut earlier this month there has been plenty of speculation regarding how quickly the bank is likely to cut rates. While inflation has fallen steadily back to target, other leading indicators have been trending higher, reflecting a better economic backdrop in the UK. With that in mind, the bank is expected to exercise caution as it moves away from post-pandemic tightening.
UK CPI Up Next
Looking ahead, focus will be on the latest UK CPI reading tomorrow. The market is looking for an uptick to 2.3% from 2% prior. If seen, the data should further endorse the view that the bank will remain on hold through September, keeping GBP supported near-term.
Technical Views
GBPUSD
The sell off in GBPUSD has stalled for now, with price reversing higher ahead of testing support at 1.2612. The market is now retesting the underside of the broken bull channel and the 1.2832 level. With momentum studies bullish, focus is on fresh push higher if bulls can get back above this zone.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.