Pound Sterling edges down due to weak UK Employment, uncertainty ahead of Fed decision
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The Pound Sterling declines from 1.2740 against the US Dollar due to weak UK employment data and a firm US Dollar. The BoE could struggle to shift toward policy normalization as steady UK wage growth offset the impact of weaker employment levels. Investors see the Fed arguing to maintain a restrictive framework for longer. The Pound Sterling (GBP) falls back after facing selling pressure near 1.2740 in Tuesday’s London session. The GBP/USD pair weakens due to poor United Kingdom (UK) Employment data for three months through April and a firm US Dollar (USD) amid expectations that the Federal Reserve (Fed) will delay interest-rate cuts. The UK Office for National Statistics (ONS) reported that the labor market recorded a drawdown for the fourth time in a row. Employment fell by 140,000 workers in the three months to April, less than the 177,000 decline in employment seen in the January-March period. The ILO Unemployment Rate rose to 4.4%, higher than the expected 4.3%. The labor market data indicates that firms struggle to bear the consequences of the Bank of England’s (BoE) higher interest rates. Meanwhile, wage growth remained steady in the February-April period. Average Earnings Excluding Bonuses, which is a wage inflation measure, grew in line with estimates and the prior release of 6.0%. Also, Average Earnings Including bonuses grew steadily by 5.9%, upwardly revised from 5.7% and higher than the estimates of 5.7%. High wage growth could hamper the BoE’s move towards lowering interest rates. Daily digest market movers: Pound Sterling weighed by weak labor market data The Pound Sterling faces selling pressure near 1.2740 after a short-lived pullback against the US Dollar. The US Dollar remains firm as investors turn cautious ahead of the United States (US) Consumer Price Index (CPI) data for May and the Federal Reserve’s interest rate decision, which are scheduled for Wednesday. The…
Filed under: News - @ June 11, 2024 7:12 am