Average hourly earnings fall 0.2% in June, and this takes its toll on the pound. The unemployment rate drops to 6.4% as expected in June and jobless claims are certainly encouraging with a drop of 33.6K. Yet the focus is on salaries and without a rise, rates will not rise so quickly. Therefore the slide in cable.
Towards the publication, GBP/USD was trading higher, at around 1.6820. It is now losing the 1.68 handle.
Opinion: BOE could enhance the view of a rate hike in 2014
Claimant Count Change (jobless claims) for July carried expectations for a drop of nearly 30K, following the previous trend. The unemployment rate for June was expected to slide to 6.4%. Probably now the biggest focus of the markets: Average Hourly Earnings were predicted to slide by 0.1% in June after rising only 0.3% in May.
It is important to note that this figure for May was now revised to the upside: a rise of 0.4% instead of 0.3% originally reported. However, these figures are certainly not encouraging.
Job figures usually gain a lot of traction. However, today they are slightly overshadowed by the Bank of England’s Inflation Report. What will Carney hint?
More: Bounce-back risks on sterling
Cable has completed a full round trip: from current levels, all the way up to nearly 1.72 on Carney’s rate hike comment in June. It later dropped back down, also due to Carney’s retreat from these comments.
For more, see the GBPUSD forecast
In the latest podcast, we talked about the inflation report, the pound and more:
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