When are the UK wages and how could they affect GBP/USD?

Dhwani Mehta FXStreet

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 January, are expected to decelerate 3.2%, while ex-bonuses, the wages are expected to rise 3.4% in the reported period.

The number of people seeking jobless benefits are seen increasing by 2.7k in the three months to February versus 14.2k additions booked last. The ILO unemployment rate is expected to hold steady at 4.0% during the period.

How could they affect GBP/USD?

A disappointment on the UK’s wages could trigger a fresh round of selling in the pound while markets remain watchful of the Brexit-related developments. The rates could test the 1.3250 (daily pivot). A break below the last, a test of 1.3200 (round figure) remains inevitable.

On a positive surprise, the GBP/USD pair could extend the recovery and test the the 1.3300 barrier, above which the immediate resistances lie at 1.3315 (classic daily R1) and 1.3341 (Mar 14 high).

“The upcoming publication is for February, and an increase of 2.7K is on the cards. Recurring increases in jobless claims will eventually lead to rises in unemployment. Markets have ignored it so far and will likely ignore it now, as Brexit overshadows everything. Nevertheless, if you are trading Sterling for the long-run, it is something to keep an eye for,” Yohay Elam, Senior Analyst at FXStreet explains.

Key Notes

UK: Unemployment rate likely to hold steady - TDS

GBP/USD Forecast: Third meaningful vote out of the way, UK jobs data eyed for short-term impetus

Brexit Monitor - 60% probability of a long Brexit extension

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).

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

RBNZ set to pause interest-rate easing cycle as new Governor Breman faces firm inflation

The Reserve Bank of New Zealand remains on track to maintain the Official Cash Rate at 2.25% after concluding its first monetary policy meeting of this year on Wednesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.