Pound Lower after Labor Data

The Pound Sterling was lower versus the US Dollar after the latest labor data showed that annual wage growth improved to 2.9% over the three-month period through March, largely as predicted by economists. The ILO unemployment rate was flat at the forecasted 4.2% while the claimant count was unexpectedly higher. FX traders used today’s labor data to gauge whether inflation might be affecting higher wage growth which the Bank of England would want to see in order to push through a rate increase. Last week, the BoE kept rates on hold and lowered growth projections; markets are expecting an August rate hike, though swaps have shown that that expectation has fallen from 60% to 50% over the last week.

As reported at 11:20 am (BST) in London, the GBP/USD was trading at $1.3543, down 0.10% and off the earlier peak of $1.3572 while the low is at $1.3524. The EUR/GBP is trading slightly higher at 0.88036 Pence, a gain of 0.04607%; in today’s trading the pair has ranged from a session low of 0.87936 Pence to a peak of 0.88200 Pence.

Eurozone GDP Growth Unsurprising

In the Eurozone, preliminary first quarter GDP data was flat at 2.5% on an annualized basis, largely as expected. Meanwhile, seasonally adjusted industrial production fell in March to 0.5% (month-over-month) from the previous -0.9% (which was revised from -0.8%); economists had predicted that the numbers would come in at 0.7%. On a brighter note, the Eurozone’s ZEW survey of economic sentiment showed a rise to 2.4 in May against expectations of a rise to 2.0% from a reading of 1.9. The EUR/USD was trading at $1.1923, down 0.02%; the pair has ranged from a low of $1.19100 to a peak of $1.19400 in today’s session.

Barbara Zigah is a freelance journalist living in Ghana, who specializes in Forex-related content; her online work has appeared in the IB Times, NASDAQ, Benzinga, and Seeking Alpha.