Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Pound Sterling Ticks Lower vs Euro and Dollar after Mixed UK Jobs Data

Published 11/06/2024, 16:00
Pound Sterling Ticks Lower vs Euro and Dollar after Mixed UK Jobs Data
- - UK labour-market data was mixed with clear evidence of weaker demand offset by higher-than-expected wages growth. The Pound to Dollar (GBP/USD) exchange rate traded just below 1.2730 with the Pound to Euro (GBP/EUR) exchange rate at 1.1820 and just below 22-month highs just below 1.1850 recorded on Monday. The latest UK labour-market data recorded an increase in the unemployment rate to 4.4% compared with expectations of no change at 4.3% and the highest reading since October 2021. The data set also indicated that the number of people on payrolls declined by a further 3,000 for May after a revised 36,000 fall for April. Vacancies continued to decline, the 23rd successive retreat while the inactivity rate increased again. Headline average earnings increased 5.9% over the year, unchanged from a revised 5.9% the previous month and above consensus forecasts of 5.7%. Underlying earnings growth held at 6.0% and in line with market expectations. The data continues to indicate that the labour market is weakening, but the Bank of England (BoE) will still be uneasy over the rate of growth in earnings growth. The BoE will have to decide whether the overall labour-market data is consistent with a decline in inflation to the 2% target on a sustained basis. Key Quotes: Lloyds (LON:LLOY) Bank:

"UK monthly labour market data released this morning presented a picture of moderating activity but still relatively sticky wage growth. Whole economy regular pay growth (excluding bonus payments) was unchanged at 6.0% in the three months to April, slightly lower than both our and consensus forecasts for a slight rise to 6.1%. Private sector regular pay growth fell to 5.8% from 5.9%, continuing the decline since last year’s highs, although the Bank of England will be looking for further slowing." "The labour market quantities data should offer some hope that these pay pressures will eventually subside. The UK unemployment rate edged up to 4.4% from 4.3% as we expected, but it was above the median market forecast for no change. The level of employment fell by 139k in the latest three months." "The pound fell slightly in the immediate response to this morning’s UK labour market statistics. It also erased some of its gains versus the euro, with the latter weighed by perceived political risks after French President Macron called for new elections for the National Assembly. "

Barclays (LON:BARC) Research:

"UK employment data was marginally softer than expected this morning with weekly earnings printing at 6% 3M/YoY vs. expectations at 6.1%, whilst the unemployment rate was 4.4% vs. expectations of 4.3%. Whilst the data was slightly softer than expected Barclays Research continue to think that wage growth remains high vs. the BOE’s overall inflation target of 2%, and think the BOE will wait for further soft prints in the jobs data before they start pointing to a rate cut in August"

This content was originally published on

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.