Mixed Employment Data Leaves Sterling Without Direction

The Great Britain pound demonstrated mixed performance today, rising against some majors, while falling versus others. That could be explained by the Wednesday’s release of employment data, which had both good and bad parts.

According to the report from the Office for National Statistics, the unemployment rate demonstrated an unexpected drop from 4.4% to 4.3% in the period from May to July, reaching the lowest level since 1975. The number of claims for unemployment benefits dropped by 2,800 in August from the previous month instead of rising by 800 as was predicted by analysts. But on the negative side, average weekly earnings rose 2.1% in May-July from the same period a year ago — not a bad reading by itself, but lagging behind the predicted increase by 2.3%.

Traders’ attention is focused on tomorrow’s policy meeting of the Bank of England. While no changes to the current policy are expected, it will be interesting to see how many policy makers will vote for an interest rate hike and what comments they will make.

Meanwhile, the next round of Brexit negotiations between the European Union and Great Britain were postponed from September 18 to September 25.

GBP/USD opened at 1.3282, rallied to 1.3328 (the highest level since September 13, 2016), but backed off to 1.3205 as of 21:32 GMT today. EUR/GBP declined from 0.9007 to 0.9000 after rising to the daily high of earlier. GBP/JPY dropped from 146.28 to 145.87.

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