GBP/USD Unfazed by Solid Job Figures, Market Focus on Later Events
- The UK unemployment rate remained unchanged at decade low 5.1%, as expected
- Core weekly earnings rose to 2.2%, above expectations
- GBP/USD little changed after the figures hit the wires
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The British Pound was little changed versus the US Dollar (at the time this report was written) after today's UK employment data printed solid figures. The Office for National Statistics (ONS) reported that the unemployment rate from November to January remained unchanged at 5.1%, as the prior and expected rate. The UK added 116K jobs in the same time period, which was below the expectation for an addition of 144K jobs and the prior 205k print. The number of people employed rose to a record 31.42 million. The Jobless Claims figure beat expectations and signaled a drop of -18.0K, which was better than the expected -9.1K figure. The prior reading was revised to -28.4K from the -14.8K print. Wage figures showed that Core average weekly earnings (which excludes bonuses) rose by 2.2% in the last three months from the prior 2.0%, which was better than the 2.1% figure expected by economists. Average weekly earnings including bonuses rose as well to 2.1% from the prior 1.9%, above the 2.0% print expected. Looking into the report, the ONS said there were 22.94 million people working full-time, 302,000 more than for a year earlier, while 8.48 million people are working part-time, 177,000 more than for a year earlier.
The data today comes a day prior to the BoE rate decision, in which the central bank is expected to keep policy unchanged. In their latest policy meeting, the Monetary Policy Committee (MPC) commented that risks to inflation projections are skewed a little to the downside in the near term. This may have put slighter emphasis on the wage figures, closely monitored by the BoE, as wage growth may help induce inflation pressures. It appears that the figures, although beating expectations by the most part, were not immediately sufficient to change the market’s outlook on BoE policy. Furthermore, as was mentioned earlier today by DailyFX currency Strategist Ilya Spivak, UK Chancellor of the Exchequer George Osborne is set to make a budget speech to parliament later today, and some austerity measures are expected, which could mean that fiscal policy will not offer meaningful support to economic growth in the year ahead. Taking this into consideration, and the monetary policy announcement from the Federal Reserve later today, it appears that the market focus is elsewhere at the moment and the GBP/USD was little changed.
GBPUSD 5-minute Chart