Unemployment in the UK drops to only 6.9%. This positive shocker is below the initial 7% BOE threshold. Claimant Count Change fell by 30.4K, within expectations. UK jobless claims were expected to drop by around 30K in March after a drop of 37K in February (revised from 34.6K). The unemployment rate for February was predicted to remain unchanged at 7.2%. January’s number was revised to the downside, to 7.1%.
GBP/USD was surging before the publication, rising all the way from 1.6720 to 1.6770. It is now extending its gains above 1.68. The high is 1.6816. This is a 100 pip move. Was the figure leaked?
Yesterday, GBP/USD dropped sharply before the release of inflation data only to jump much higher immediately afterwards, even though UK inflation numbers only hit expectations and nothing more. This kind of front running of UK publications is not uncommon.
The initial forward guidance from the Bank of England was for interest rates to remain low at least until the unemployment rate hits 7%. With the faster than expected drop in the rate, forward guidance was changed back in February and became more vague.
The current level of inflation and unemployment allow for policy to remain at current levels for quite some time.
Support appears at 1.6717 and resistance at 1.6820. For more, see the GBPUSD forecast.
This is how the chart looks. Note that the pair enjoyed a gradual rise towards the publication and then extended the move: