Mixed jobs report from the UK: wages are up 2.5% y/y in November as expected. However, the number of jobless claims in December continues rising: 8.6K. In addition, the previous Claimant Count Change number was revised up, for the worse, from 5.9K to 12.2K. The overall number of those in employment has risen, so there is something for everyone here.
GBP/USD was already on the rise and now extends its gains to a new post-Brexit high of 1.4118. The jobs report does not really justify a strong pound, but US dollar weakness is dominant across the board.
Update: The pair stabilizes at 1.41 after the rush higher earlier in the day.
The UK was expected to report a small gain in the number of the jobless: 2.3K in December after 5.9K in November. The unemployment rate was projected to remain unchanged at 4.3%. Most importantly, the annual rise in wages carried expectations for rising by 2.5% in November, exactly like in October.
GBP/UDS was trading just under 1.41 ahead of the publication. US dollar weakness sent the pair higher and this weakness was endorsed by US Treasury Secretary Steven Mnuchin. The high-ranking official said that “a weaker dollar is good for the US”. This sent the greenback even lower.
UK inflation stood at 3% in December and remains above the rise in wages. This means that standards of living are falling. Wages have been the biggest mover of the pound in these jobs reports. Later this week, we’ll get the first estimate of UK GDP for Q4 2017.
More: GBP/USD: Reaching Overbought Territory; Not A Buy Around Current Levels – Credit Agricole
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