UK Jobs report overview
The UK labor market report is expected to show that the average weekly earnings, including bonuses, in the three months to December, are expected to accelerate to 3.5%, while ex-bonuses also, the wages are also seen higher at 3.4% in the reported period.
The number of people seeking jobless benefits increased 2.4k in the three months to January versus 20.8k additions booked last. The ILO unemployment rate is expected to hold steady at 4.0% during the period.
How could they affect GBP/USD?
An unexpected drop in the UK’s wages could trigger fresh selling in the pound while markets remain watchful of the Brexit-related developments. The rates could test the 1.2889/83 (5, 50-DMA). A break below the last, a test of the 1.2839 (100-DMA) level remains inevitable.
On a positive surprise, the GBP/USD pair could erase losses and regain the 1.2950 barrier, above which the immediate resistances lie at 1.2970 (20-DMA) and 1.3000 (psychological levels).
“The UK labor market data is expected to support the GBP/USD in its corrective move upwards after Sterling broke away from the downward sloping trend last Friday and it trades above 1.2900 level. The UK labor market is tight and the combination of the low unemployment rate is pushing the starting wages as well as existing wages higher, the trend that the Bank of England considers the most important driving force of the future inflation in the UK,” Mario Blascak (PhD), Editor-in-Chief at FXStreet explains.
Key Notes
Market themes of the Day: UK labor market set to remain strong in January
GBP/USD Forecast: Set-up favours bullish traders, UK jobs data eyed for some impetus
EUR/GBP: 3 reasons to rise and the big levels to watch
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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