GBP/USD exchange rate muted despite downbeat UK jobs data
The pound US dollar (GBP/USD) exchange rate is trapped in a narrow range this morning following the release of the latest UK jobs data.
At the time of writing the GBP/USD exchange rate is trading at around $1.2450, virtually unchanged from this morning’s opening rate.
Pound (GBP) to fall following UK inflation?
The pound (GBP) could face some pressure in mid-week trade with the publication of the UK’s latest inflation data.
The figures are expected to report a deceleration in both headline and core inflation in March and report that inflation is rapidly approaching the Bank of England’s (BoE) 2% target.
The expected slowdown in inflation will also come hot on the heels of today’s disappointing jobs report.
UK unemployment in February printed higher than expected, coming it at 4.2% rather than a more modest expectation of 4%, and rose from an upwardly revised figure of 4% in January.
Furthermore, wage growth cooled in the three months leading to February, with the index printing at 6%, down from a previous figure of 6.1%.
The recent data stoked fears amongst GBP investors on the basis of a seemingly weakening UK labour market.
The lacklustre labour report, coupled with another cooling of inflation may bolster BoE interest rate cut bets and weigh heavily on the pound on Wednesday.
Data-light week to infuse volatility in the US dollar (USD)?
The US dollar (USD) is enjoying some support this morning as the safe-haven ‘greenback’ is being underpinned by this morning’s cautious market mood.
Likely causing this morning’s risk-averse trading conditions are continued tensions in the Middle East.
Markets are reacting to the latest drone strike from Iran onto Israel in retaliation to Israel’s alleged attack on its embassy in Damacus. This has prompted markets to remain skittish so far this week, lifting the US dollar.
Looking ahead to the remainder of this week, significant US data releases are few and far between which could prompt USD investors to turn their attention to the latest initial jobless claims for the week ending 13 April, expected for release on Thursday.
Initial jobless claims are expected to have risen over the week, which may hobble USD exchange rates on the back of a seemingly weakening labour market.
Comments are closed.