UK Employment Change
The UK Employment report showed a 24K expansion during the three-months though June following a 19K rise during the previous period.
UK Economic Calendar – August 13, 2024
A deeper look at the report showed the Unemployment Rate unexpectedly narrowing to 4.2% from 4.4% in May, while Average Earnings excluding Bonuses narrowed to 5.4% from 5.7% during the same period.
At the same time, claims for unemployment benefits jumped to 135.0K in July from 32.3K the month prior, with the Claimant Count Rate widening to 4.7% from 4.4% in June.
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GBP/USD Chart – 15 Minute
Chart Prepared by David Song, Strategist; GBP/USD on TradingView
Despite the mixed data prints, GBP/USD traded higher following the release, with the exchange rate ending the day at 1.2877. The strength in GBP/USD persisted throughout the remainder of the week as it closed at 1.2945.
Looking ahead, fresh figures coming out of the UK may generate a mixed reaction as the UK Unemployment Rate is expected to fall to 4.1% from 4.2% during the three-months through July, while Average Earnings excluding Bonus is seen narrowing to 5.1% from 5.4% during the same period.
With that said, signs of a weakening labor market may produce headwinds for the British Pound as it puts pressure on the Bank of England (BoE) to further unwind its restrictive policy, but a positive development may prop up GBP/USD as it limits the central bank to deliver back-to-back rate cuts.
Additional Market Outlooks
EUR/USD Pulls Back Ahead of August High with US CPI in Focus
US Dollar Forecast: USD/JPY Eyes August Low as NFP Report Disappoints
GBP/USD Rebound Pushes RSI Back Towards Overbought Zone
Gold Price Outlook Supported by Positive Slope in 50-Day SMA
--- Written by David Song, Strategist
Follow on Twitter at @DavidJSong