22 Jan 2014
GBP/USD remains in bullish territory on jobs momentum
FXstreet.com (London) - GBP/USD remains in bullish territory following the big drop in UK unemployment numbers earlier today.
Jobs growth overshoots expectations
UK unemployment dropped to 7.1 percent, down from 7.4 percent in November – overshooting expectations for a fall to 7.2 percent. The UK economy recorded a 280k net increase in employment over the three months between September and November, with unemployment falling a record 167k. Despite the sharp upswing in employment, wage growth remains subdued, climbing just 0.9 percent year-on-year. With inflation running at 2.0 percent, the pressure on real wages continues to be a concern.
Focus could shift to inflation
Although the UK unemployment rate is now a hair’s breadth from Mark Carney’s 7.0 percent unemployment threshold, there has been no shifting of the goal posts by the BoE. Instead the MPC has stated that there is “no immediate need” to raise the bank rate. Instead it is likely that the BoE will let job growth run into the second half of 2014, shifting focus instead to maintaining inflation at the 2 percent target rate.
GBP/USD is currently trading at USD1.6558 up 0.51 percent on the session from an open of USD1.6476. With little to disrupt momentum, the pair remains in mildly bullish territory.
Jobs growth overshoots expectations
UK unemployment dropped to 7.1 percent, down from 7.4 percent in November – overshooting expectations for a fall to 7.2 percent. The UK economy recorded a 280k net increase in employment over the three months between September and November, with unemployment falling a record 167k. Despite the sharp upswing in employment, wage growth remains subdued, climbing just 0.9 percent year-on-year. With inflation running at 2.0 percent, the pressure on real wages continues to be a concern.
Focus could shift to inflation
Although the UK unemployment rate is now a hair’s breadth from Mark Carney’s 7.0 percent unemployment threshold, there has been no shifting of the goal posts by the BoE. Instead the MPC has stated that there is “no immediate need” to raise the bank rate. Instead it is likely that the BoE will let job growth run into the second half of 2014, shifting focus instead to maintaining inflation at the 2 percent target rate.
GBP/USD is currently trading at USD1.6558 up 0.51 percent on the session from an open of USD1.6476. With little to disrupt momentum, the pair remains in mildly bullish territory.