The Pound Sterling managed to recover after being under heavy pressure against both the US Dollar and the Euro, despite labor data which was unexpectedly disappointing. The National Statistics Office in the UK reported that the Claimant Count Change was higher than analysts had been predicting in the month of May, rising to 23.2K against a predicted 22.9K; the previous month's reading was also adjusted downward to 19.1K from 24.7K. The Claimant Count Rate edged up to 3.1% from 3.0%. The ILO unemployment rate was flat at 3.8%, as expected.
As reported at 10:06 am (GMT) in London, the GBP/USD was trading higher at $1.2717, up 0.2641% and not too far off the session peak of $1.2720. The EUR/GBP was trading lower at 0.8895 Pence, down 0.2143%; the pair has ranged from a low of 0.88949 Pence to a high of 0.89325 Pence.
Outlook for Pound Still Shaky
Analysts say that the fundamental data is only testing sentiment for the Pound, with generally knee-jerk reaction to outcomes. The driving force continues to be the race for the Prime Minister's position and how that outcome is likely to impact the October Brexit deadline. Given that, whereas in the past there would be some concerns about the Bank of England taking a policy shift, most investors believe that the BoE is going to sit on the sidelines until there is some definitive response to the uncertainty of the next Prime Minister and the Brexit.