Sterling reinforced by robust UK labour market

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Sterling reinforced by robust UK labour market, positive Brexit headlines

Sterling, UK job data and Brexit trending points

  • UK employment resides at a record high, as GBP gained in excess of 0.90 percent against American dollar, gaining 120pips in the intra-day trading so far.
  • Brexit hope adds further bullish bias, as divorce deadline might have been delayed, if a deal appeared to be likely

GBP lifted by strong UK labour market and renewed Brexit hope

Pound sterling surged over 0.88 percent against USD and also posted gains against a stack of global currencies, after Tuesday’s (Feb. 19th) data revealed a robust UK labour market. According to the UK job data released earlier today, 167k new jobs were created in the last quarter of 2018, beating the expectation of 152k as well as prior reading of 141k by a wide margin. While UK unemployment rate remained at a record high to 4 percent, the wage-growth had also remained stable at 3.4 percent. Prefixing further positive figures, last week, the UK inflation data showed that the inflation had fallen back to 1.8 percent, indicating that the UK consumer index could have still posted a boost despite Brexit fears.

GBP/USD daily price chart

GBP/USD daily price chart

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Besides the English Channel, on Brussels, the European Commission president, Jean-Claude Junker had been quoted saying that the EU commission might consider a delay in Brexit deadline for a few months, if it could prevent a no-deal catastrophe. As a German newspaper, Stuttgarter Zeitung reported that UK requested the delay to buy more times and EU did not oppose the move as well, the pound sterling started to skyrocket, currently residing at 1.3033 against American dollar, up by 0.88 percent, while the GBP gained 0.68 percent against the euro to 0.8688.

EUR/GBP daily price chart

EUR/GBP daily price chart

Bottom Line

From a technical perspective, the GBP/USD pair would likely to remain above 1.30, while initial resistance level lies at 1.2940, on a 200-day moving average. On the flipside, the pound sterling has further rooms to break above its yearly high at 1.3202 this week.

Over rekindled Brexit hope and stronger job data, the GBP break-through did not seem to be short-lived and further gains appears to be written on the starts against both euro and American Dollar, as euro had been grappling with a recession risk and US economy is slowing, a proof of which could have been its retail sales data being drowned to 10-year low. Fed’s halted rate hike would also wind the GBP greenback against American dollar.

Read more on British pound here

[Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.]

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