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GBP May Get a Lift from Robust Jobs and Wages Data
While UK growth remains tepid at best, the jobs market continues to shine with last month’s numbers showing unemployment at a 43-year low. Wages have also been picking up over the past few months from a lowly level and with UK inflation moving lower, real wages are back. Whether this means a pick-up in high street spending remains to be seen but higher wages will eventually boost domestic UK inflation, and will be watched closely by the Bank of England. The market is currently showing a 44% probability of a 0.25% rate hike in August with this number rising to 85% for a hike in November and a rate hike this year is now back on the table.
EURGBP continues to edge lower and may lose further ground if UK data surprises to the upside. On the upside the 200-day moving average at 0.88315 is acting as resistance with the 0.8728 area the first downside target.
EURGBP Daily Price Chart (August 2017 – May 15, 2018)
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--- Written by Nick Cawley, Analyst
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