HomeLive CommentsGBP jumps as UK unemployment rate fell, wage growth accelerated

GBP jumps as UK unemployment rate fell, wage growth accelerated

Sterling jumps notably as positive response to UK job data. Unemployment rate dropped to 4.3%, down from 4.4%, and beat expectation of 4.4%. Average weekly earnings exclude bonus rose 2.6% 3moy, accelerated from 2.5% 3moy. More surprisingly, Average weekly earnings include bonus rose 2.8% 3moy, accelerated from 2.7% 3moy and beat expectation of of 2.6% 3moy. Claimant count, on the other hand, rose 9.2k versus expectation of -5k.

  • UK unemployment rate Jan: 4.3% vs exp 4.4% and prior 4.4%
  • Average weekly earnings exclude bonus Jan (3M/Y): 2.6% vs exp 2.6% vs prior 2.5%
  • Average weekly earnings include bonus Jan (3M/Y): 2.8% vs exp 2.6% vs prior 2.7%
  • Claimant count Feb: 9.2k vs exp -5.0k vs prior -1.6k

The set of data overall should be more than welcomed by BoE hawks. In particular, wage growth is picking up pace and would add to their argument of a May hike. Be ready and we might see a hawk or two vote for a hike in the announcement tomorrow. In particular, UK has the Brexit transition deal in pocket already.

EUR/GBP is leading the way down as fall from 0.8976 resumes. It’s on course for a test on 0.8686 key support level. As this is a strong, important support zone, EUR/GBP could face some support there at initial attempt.

GBP/USD’s also jumps sharply after the release, indicating that retreat from 1.4087 is likely finished. The pair is also supported well above 4 hour 55 EMA. A test on 1.4087 would likely be seen soon.

Featured Analysis

Learn Forex Trading