When are jobs in the UK and how could they affect GBP/USD?
Presentation of the UK employment report
On Tuesday morning, the UK’s Office for National Statistics (ONS) will release claimant count figures for January as well as the unemployment rate for the three months to December at 07:00 GMT.
With expectations of another rate hike by the Bank of England, coupled with upbeat economic growth and inflation fears, today’s jobs report becomes crucial for traders in the pair. GBP/USD. Cable’s recently shelved performance above 100-DMA also highlights today’s employment numbers.
The UK labor market report is expected to show average weekly earnings, including bonuses, in the three months to December rose to 3.9% from previous figures of 4.2%, while out bonuses, wages are expected to decline to 3.6% from 3.8% over the period shown.
Additionally, the ILO unemployment rate is expected to remain unchanged at 4.1% for the three months to December. It should be noted that the claimant count change numbers are expected to improve to -28.0K from -43.3K previously in January.
Impact of deviation on GBP/USD
Readers can find FXStreet’s exclusive deflection impact map of the event below. As observed, the reaction is likely to remain confined around 20 pips in deviations of up to + or -2, although in some cases, if notable enough, a deviation can fuel moves above 60-70 pips .
How could they affect GBP/USD?
GBP/USD has struggled to justify the BOE’s hawkish concerns amid risk-free sentiment and Brexit woes lately, keeping the quote within a 100-pip trading range between the 100-DMA and 1.3600. That said, the quote has recently encouraged a pullback in the US Dollar, due to easy Treasury yields, while recording small gains around 1.3540 early Tuesday morning in Europe.
That said, UK jobs data may offer some intermediate direction for GBP/USD prices, but could see a softer response as global markets remain most interested in Russian and Fedspeak updates lately. . Even so, stronger data may keep pair buyers hopeful.
“The UK recovery should continue to drive down the ILO unemployment rate in December (market f/c: 4.1%),” Westpac analysts said.
Technically, the recent rebound in the Momentum indicator allows pair buyers to build muscle ahead of key data/events. However, 1.3600 and the 200-DMA level of 1.3700 will limit the short-term upside of the wired pair. On the contrary, the 100-DMA level near 1.3500 is challenging GBP/USD sellers.
GBP/USD forecast: Pound tests key support at 1.3500, under pressure from risk aversion
GBP/USD crosses above 1.3500 on Brexit, Russia news and UK jobless rate
About jobs in the UK
The average UK salary published by the Office for National Statistics (ONS) is a key short-term indicator of the evolution of pay levels within the UK economy. Generally speaking, positive earnings growth anticipates positive (or bullish) for the GBP, while a weak reading is seen as negative (or bearish).