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Sterling slides after UK jobs beat expectations, GBP/USD breaks key levels

GBP/USD fell from just above 1.3450 to just above 1.3350, trading near 1.3380 late, after wage growth data came in cooler than expected.

Reported · Written up by our desk · Major Pairs

British pound Sterling fell against the US dollar even after UK labour market data beat consensus, with GBP/USD dropping from a London high just above 1.3450 to a New York low just above 1.3350 and trading near 1.3380 late in the session, the weakest of the majors on the day.

According to FXStreet, the headline labour figures supported a Sterling bid, including employment growth of 147K in the three months to May versus 100K previously, a higher claimant count in June, and a decline in the unemployment rate to 4.9% from 5.0% expected. However, the pay figures disappointed, with average earnings including bonuses slowing to 4.3% from a 4.5% consensus.

FXStreet said the pay line is the one the Bank of England focuses on, and the market treated the rest of the report as less important as wage cooling reinforced the view that future rate hikes may be limited. The pair moved to its first session below both the 50-day and 200-day exponential moving averages since the mid-July rebound began.

Sterling was also weighed by political uncertainty around the UK government, FXStreet added, as markets await further details on the cabinet and fiscal plans that could affect UK asset credibility and term premium pricing. The dollar, it said, continued to benefit from a war premium that Sterling could not match.

Latest closeGBP/USD 1.348 ▼0.5%

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