The British pound has posted gains for a second straight day. In the European session, GBP/USD is trading at 1.3636, up 0.28% on the day.
UK employment declines, wages dip
The UK employment report didn't shine but there were no nasty surprises and investors reacted with a thumbs-up for the British pound.
The number of employees on payrolls fell by eight thousand in August, marking a seventh consecutive decline. Still, this figure was less than expected, suggesting that perhaps the worst is over for the labor market, which softened after the government enacted higher payroll taxes and a hike in the minimum wage.
Today's employment report has increased market expectations that the Bank of England will maintain rates at 4.0% at Thursday's meeting. As long as the labor market remains stable, the central bank is unlikely to lower rates, as inflation has been moving higher.
The BoE has projected that inflation will peak at 4%, double its target. If inflation remains at such high levels, it's doubtful that the BoE will lower rates before 2026. The August inflation report, which will be released on Wednesday, is expected to show that headline CPI was unchanged at 3.8% y/y and core CPI eased to 3.6% from 3.8%.
GBP/USD Technical
GBP/USD is testing resistance at 1.3629. Above, there is resistance at 1.3662
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The British pound has posted gains for a second straight day. In the European session, GBP/USD is trading at 1.3636, up 0.28% on the day.
UK employment declines, wages dip
The UK employment report didn't shine but there were no nasty surprises and investors reacted with a thumbs-up for the British pound.
The number of employees on payrolls fell by eight thousand in August, marking a seventh consecutive decline. Still, this figure was less than expected, suggesting that perhaps the worst is over for the labor market, which softened after the government enacted higher payroll taxes and a hike in the minimum wage.
Today's employment report has increased market expectations that the Bank of England will maintain rates at 4.0% at Thursday's meeting. As long as the labor market remains stable, the central bank is unlikely to lower rates, as inflation has been moving higher.
The BoE has projected that inflation will peak at 4%, double its target. If inflation remains at such high levels, it's doubtful that the BoE will lower rates before 2026. The August inflation report, which will be released on Wednesday, is expected to show that headline CPI was unchanged at 3.8% y/y and core CPI eased to 3.6% from 3.8%.
GBP/USD Technical
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