Pound Falls On Weak Employment Data
May 14 2024 - 2:51AM
RTTF2
The British pound weakened against other major currencies in the
European session on Tuesday, after data showed that the average
earnings in the U.K. grew better than expected in March and the
jobless rate rose slightly, while the fall in employment was less
than expected and vacancies continued to decline, giving more
evidence of a cooling labor market to Bank of England that is
preparing to lower interest rates soon.
Data from the Office for National Statistics showed that the
unemployment rate for those of age 16 and older rose to 4.3 percent
in the three months to March, which was in line with
expectations.
The claimant count increased by 8,900 on the month to total
1.579 million in April, which was much less than the 13,900
economists had forecast.
Employment decreased by 178,000 persons from the previous
period, which was much smaller decrease than the 215,000 slump
economists were looking for.
The number of vacancies decreased by 26,000 sequentially in
February to April to 898,000 jobs. Vacancy numbers decreased on the
quarter for the 22nd consecutive period, the ONS said.
Wages excluding bonuses grew 6.0 percent year-on-year in the
January to March period. Economists had forecast a gain of 5.9
percent in regular pay that serves as the preferred gauge for the
Bank of England to measure wage inflation.
Pay including bonuses grew 5.7 percent annually in the three
months to March. Economists had expected an increase of 5.3
percent.
In the European trading now, the pound fell to a 4-day low of
0.8616 against the euro, from an early 1-week high of 0.8587. The
pound may test support near the 0.87 region.
Against the U.S. dollar, the pound slid to a 4-day low of 1.2509
from an early high of 1.2564. On the downside, 1.23 is seen as the
next support level for the greenback.
Against the yen and the Swiss franc, the pound edged down to
195.73 and 1.1362 from an early 2-week high of 196.62 and nearly a
2-week high of 1.1414, respectively. The pound may test support
near 190.00 against the yen and 1.11 against the franc.
Looking ahead, U.S. NFIB business optimism index for April,
Canada new Motor vehicle sales and wholesale sales data for March,
U.S. PPI for April and U.S. Redbook reports are slated for release
in the New York session.
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