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Pound Sterling attempts a  recovery even soft labor data. BoE’s Pill kept doors open for further policy tightening. The UK’s Consumer Price Index data is expected to point to softening inflation pressures. The Pound Sterling (GBP) rebounded as investors digested the soft wage data, which dampened the outlook for consumer spending and increased the chances of another pause by the Bank of England (BoE) at its November monetary policy meeting. The GBP/USD pair remains on the back foot after stronger-than-expected US Retail Sales data added to evidence of strength in the US economy, lifting the US Dollar (USD) and weighing on the pair. BoE policymaker Swati Dhingra commented after the release of the soft wage report that the labor market is loosening and she doesn’t see further wage growth momentum. Last week, Dhingra said that the central bank could look for rate cuts if the growth rate remains below expectations. After labor earnings data, investors will focus on the inflation data for September, which will set the undertone of the BoE policy. Inflation in the UK economy is highest among G7 economies. Therefore, further softening of consumer inflation would bring some relief for BoE policymakers. Market participants will also keep an eye on US President Joe Biden’s visit to Israel amid escalating tensions in the region. Daily Digest Market Movers: Pound Sterling rebounds US Dollar retreats Pound Sterling finds support near 1.2150 after failing to climb above the round-level resistance of 1.2200 as the United Kingdom wage data remains softer than anticipated. Three month-to-August Average Earnings excluding bonuses softened to 7.8% as expected from the former release of 7.9%. In the same period, the Average Earnings data including bonuses decelerated to 8.1% from the consensus of 8.3% and the prior release of 8.5%. Soft wage data would dampen the overall consumer spending. The UK’s Office for National Statistics…

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Filed under: News - @ October 18, 2023 12:08 am