Sterling Price Outlook: GBP/USD Eases Despite Strong UK Jobs Data

 #GBP/USD#  #OPINIONLEADER#  #traderoftheweek#  #Tickmill# Sterling Price Outlook: GBP/USD Eases Despite Strong UK Jobs Data

The GBP/USD has declined despite better than expected UK employment data which suggests underlying weakness is very strong, although worries may arise that job losses will rise after the UK’s furlough scheme ends.

It went to the lowest level for recent periods, below 1.38, despite a bumper UK labor market report that showed UK employment up as expected in May, average earnings including bonuses up by more than predicted in June and a lower than forecast June unemployment rate.

Possilbe reason for the Pound's reaction could be that the UK's furlough scheme to help employees laid off temporarily by the coronavirus pandemic will be phased out by the end of Sep and it's possible that traders are waiting to see whether that pushes job losses back up.


In the meantime, UK inflation data Wednesday will be next focus of attention for sterling traders, with the headline inflation rate expected by economists to dip to 2.3% y/y in July from the previous 2.5%. A larger fall might help persuade the Bank of England that a tightening of UK monetary policy is unnecessary near-term and therefore weaken Sterling further.