Sterling holds at five-month low after UK labour data
Reuters
Published Apr 16, 2024 07:10
Updated Apr 16, 2024 10:40
By Anna Pruchnicka
LONDON (Reuters) -Sterling stayed at a five-month low versus the dollar on Tuesday, after data showed Britain's unemployment rate rose by more-than-expected.
The pound was last flat on the day against the dollar at $1.24475, having touched its lowest since Nov. 17, earlier in the session.
It was also steady versus the euro, which stood at 85.36 pence.
The UK unemployment rate in the three months to February rose to 4.2% from 3.9%, although the Office for National Statistics said there was still some volatility in its data as it overhauls its survey which produces the figure. A Reuters poll of economists had forecast the February figure at 4%.
Regular wages excluding bonuses grew by 6.0% compared with the same period a year earlier, easing from an increase of 6.1% in the November-to-January period.
"The labour market is clearly cooling. Wages take more time to react, but they're also slowing," said Kenneth Broux, head of corporate research, FX and Rates at Societe Generale (EPA:SOGN).
"I think the drop in employment is good news for those at the Bank of England who are going to vote for rate cuts. And so in that context, again, relative to the Fed, it's not good news for the pound against the dollar," he added.
Inflation due on Wednesday will be another data point that investors will be looking at for clues on the path of the BoE's rate cuts, with markets pricing August as the most likely start date for policy easing.
Money markets are currently expecting about 46 basis points of interest rate cuts by the BoE this year, according to LSEG data, with a first cut in August seen as more likely than not, but not fully priced.
The higher-than-expected U.S. inflation figure last week has caused markets to scale back expectations of the first Federal Reserve cut even further, with expectations of the first rate cut moving from June to September.
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.