British Pound Rallies Against US Dollar Following UK Jobless Data

The British pound rose against the US dollar and the euro on Wednesday, to partly recover from the losses it suffered after Parliament approved Theresa May’s Brexit bill. The pound got support from a jobless data release in the United Kingdom, despite the somewhat mixed picture of the labor market that the release painted.

The UK Office for National Statistics said in a report published earlier today that the unemployment rate declined to 4.7% in the three months ended January, from 4.8% in the previous three months. The rate marked the lowest in data since 2005 and beat forecasts of a 4.8% unemployment rate.

The report said that the number of employed people increased 92,000 in the quarter ended January from the previous quarter and 315,000 from a year earlier, to reach 31.85 million people. The employment rate, which takes in account the proportion of people aged 16 to 64 who had jobs, was 74.6% in the same period, which is the highest level since 1971.

However, wage growth lagged behind in the three months ended January, dropping to 2.2% from 2.6% in the previous three months to miss estimates of a 2.4% growth. This comes at a time when inflation in the United Kingdom is starting to pick up due to higher crude oil prices and rising commodities costs. Today’s data could place more pressure on the Bank of England to keep its interest rates unchanged when it announces its latest policy decision on Thursday.

GBP/USD traded at 1.2199 as of 17:59 GMT on Wednesday, from 1.2234 at 08:05 GMT, the pair’s highest level since March 13. GBP/USD started the day at 1.2159. EUR/GBP traded at 0.8703, after reaching 0.8685 at 06:15 GMT, the pair’s lowest point since March 9. EUR/GBP was at 0.8726 when today’s trading started.

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