- UK Jobless Claims Change (Jun): -36.3K Actual Vs -27.0K Estimated; -32.8K Prior.
- UK ILO Unemployment Rate (May): 6.5% Actual Vs 6.5% Estimated; 6.6% Prior.
- GBP/USD Sees Knee-Jerk Dip as Weekly Avg. Earnings Misses Estimates.
Want to trade with proprietary strategies developed by FXCM? Find out how here.
The UK Unemployment Rate, which shows the percentage of persons willing to work and actively seeking employment but who are without jobs, fell to 6.5 percent in May versus 6.6 percent in April. This reading was faithful to market expectations and the unemployment rate plunged to a 5-1/2 year low. UK Jobless Claims Change, which measures the number of people who claim unemployment benefits, but are actively seeking work, fell 36,300 in June, exceeding the forecast of 27,000 decline.
Ahead of the data release, GBP/USD ran out of gas and traded sideways, flirting with the 1.7150 level. After the data, the British Pound saw a knee-jerk dip to trade at a session low of 1.7114. Newswires cited the dip as being due to weekly earnings missing estimates of 0.5 percent versus the actual print of 0.3 percent for the month of May.
On the backdrop of a roaring set of UK CPI figures released yesterday, the better-than-expected UK jobs data may act to amplify the bias towards a sooner-than-predicted Bank of England’s (BOE) interest rate hike. It is generally understood that stronger labor force translates into more income-earning workers and greater consumption, which will accelerate economic growth and heighten inflationary pressures. With the year-over-year reading for June CPI accelerating to 1.9 percent and the core CPI moving back to the 2.0 percent BOE target, this adds a critical dynamic to the BOE’s rate forecasts – emerging inflation pressures says Chief Currency Strategist John Kicklighter.
Looking ahead, GBP/USD’s focus could turn to the second round of Fed Chairwoman Janet Yellen’s testimony, later today at 14:00 GMT. However, John Kicklighter says “it is unlikely to deviate from yesterday’s remarks”, which may mean limited volatility for the greenback.
From a technical standpoint, DailyFX Currency Strategist Ilya Spivak mentions near-term support rests at 1.7062 (23.6% Fib Retracement) and resistance at 1.7173. He remains on the sidelines, waiting for a more attractive opportunity to emerge. Meanwhile, the DailyFX Speculative Sentiment Index (SSI) reveals 82 percent of Retail FX traders are short GBP/USD.
GBP/USD 5 Minute Chart
Daily Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
New to FX? START HERE!
Edward Hyon, DailyFX Research Team
Keep up to date on event risk with DailyFX Calendar
Investing NewsChina’s forex reserves dropped by a record $93.9 billion at the end of August to $3.56 trillion because the Central Bank has been selling dollars to provide a cushion to the falling yuan
ForexAmid the rising economic power of India, the talks of making the Indian currency fully convertible are gaining momentum. We look at the pros and cons.
Forex FundamentalsAs the world's second largest economy, China's challenge to America’s dominance includes a push to make the yuan (RMB), the world’s reserve currency. Whether it can do that now is unclear.
EconomicsOne particular barrier to trade that has received much attention of late and caused delays in negotiations of the TPP is exchange-rate manipulation, by which a country artificially devalues its ...
ForexBreaking news moves forex markets. Here are the top U.S. sites for tracking forex news.
InvestingAccess to financial information has grown with the expansion of digital news. Bloomberg and Thomson Reuters lead the pack, claiming a majority of the business information market.
EconomicsSouth Korea is the latest country to cut interest rates in an attempt to stimulate economic growth.
Forex EducationPeer-to-peer (P2P) currency exchange networks offer a viable and cheaper alternative for buying and selling currencies.
ForexHere is a simple breakdown of how to open an offshore forex account for US-based users, including legal requirements.
EntrepreneurshipA brief overview of the top apps that help forex traders with on time information, charts and more.