When are the UK jobs and how could they affect GBP/USD?
|UK Jobs report overview
Early Tuesday, the UK’s Office for National Statistics (ONS) will release the February month Claimant Count figures together with the Unemployment Rate in the three months to January at 07:00 AM GMT.
Given the expectations of another rate hike by the Bank of England (BOE), coupled with the upbeat economic growth and inflation fears, today’s jobs report becomes crucial to recall the GBP/USD pair buyers. Also highlighting today’s employment numbers is the cable’s recent corrective pullback from a 16-month low.
The UK labor market report is expected to show that the average weekly earnings, including bonuses, in the three months to January, rise to 4.6% from the previous figures of 4.3%, while ex-bonuses, the wages are seen remaining intact around 3.7% during the stated period.
Further, the ILO Unemployment Rate is likely to ease to 4.0% from 4.1% for the three months ending in January. It’s worth noting that the Claimant Count Change figures may have to cross the -31.9K previous readings to keep buyers hopeful.
Deviation impact on GBP/USD
Readers can find FXStreet's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined around 20-pips in deviations up to + or -2, although in some cases, if notable enough, a deviation can fuel movements over 60-70 pips.
How could they affect GBP/USD?
GBP/USD cheers softer USD, as well as cautious optimism in the market, to portray a rebound from the lowest levels since November 2020 heading into Tuesday’s London open.
While the recent improvement in British economic growth and firmer inflation data keeps pushing the BOE towards more rate-hikes, today’s employment data need to stay in line to keep the GBP/USD buyers hopeful.
As a result, Westpac says, “The UK’s recovery should continue to edge the ILO unemployment rate lower in January (market forecast: 4.0%).
Even so, major attention is given to the Fed’s rate-hike and hence any disappointment from the UK’s jobs report will be enough to recall the GBP/USD bears.
Technically, the 1.3000 psychological magnet challenges short-term GBP/USD declines ahead of a downward sloping trend line from April 2020, around 1.2950 by the press time. However, recovery remains elusive until crossing 2021 bottom of 1.3160.
Key notes
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About UK jobs
The UK Average Earnings released by the Office for National Statistics (ONS) is a key short-term indicator of how levels of pay are changing within the UK economy. Generally speaking, the positive earnings growth anticipates positive (or bullish) for the GBP, whereas a low reading is seen as negative (or bearish).
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