The UK employment data includes an additional 184k employees into payrolls in December 2021, more than analysts' forecast of 120k.
The pound sterling exchange rate entered a correction phase in trading this week. However, sterling's fundamental basis received additional support from the release of UK employment data which outperformed expectations. At the time of writing (18/January), GBP/USD was on the defensive in the 1.3640s and EUR/GBP in the 0.8360s.
 |
| GBP/USD Daily chart via TradingView |
The UK employment data includes an additional 184k employees into payrolls in December 2021, more than analysts' forecast of 120k. The number of monthly jobless claims in this period was also less than the consensus forecast.
The November 2021 unemployment rate decreased from 4.2 percent to 4.1 percent, further strengthening indications of improving employment in Queen Elizabeth II's country. The average earnings + bonus index corrected from 4.9 percent in October to 4.2 percent, but the decline was in line with forecasts. All of this supports the continuation of the British central bank (BoE) rate hike cycle which started last December.
"The labor market appears to remain tight, both after the end of the furlough scheme and the start of the Omicron wave, thus supporting our view that interest rates will be raised from 0.25 percent to 0.50 percent on February 3rd," said Paul Dales, Chief UK Economist at Capital Economics.
The UK labor market is likely to remain resilient this year. Apart from that, there are many other catalysts that could affect the pound sterling this week. While PM Boris Johnson continues to be under pressure to resign, a number of important economic data will be released over the next few days. BoE Governor Andrew Bailey will also deliver a public communication on Wednesday.
Post a Comment for "Sterling Supported by Great Labor Data "