Pound Retreats As U.K. Wage Growth Miss Expectations
17 Avril 2018 - 08:15AM
RTTF2
The pound trimmed its early gains against its major counterparts
in early European deals on Tuesday, as the U.K. labor data showed
that the average earnings rose less than expected in three months
to February.
Data from the Office for National Statistics showed that the
U.K. average weekly earnings including bonuses rose 2.8 percent
during the three months ended February, which is unchanged from the
last quarter.
Economists had been looking for a wage growth of 3 percent.
Excluding bonuses, the wages grew 2.8 percent from 2.6 percent
in the three months to January.
Meanwhile, the ILO jobless rate came in at 4.2 percent in three
months to February, which was below the 4.3 percent logged in three
months to January. This was the lowest rate since comparable data
began in 1971.
At the same time, the employment rate was 75.4 percent, the
highest since 1971.
The number of unemployed decreased by 136,000 annually to 1.42
million and employment increased by 427,000 to 32.26 million.
The currency showed mixed trading against its major rivals in
the Asian session. While it rose against the greenback and the
franc, it held steady against the yen and the euro.
The pound dropped to 153.19 against the Japanese yen, from a
high of 153.76 hit at 3:30 am ET. The pound is poised to find
support around the 151.00 area.
Having advanced to near a 2-year high of 1.3800 against the
Swiss franc at 4:25 am ET, the pound reversed direction and
retreated to 1.3769. Next key support for the pound is seen around
the 1.34 level.
The pound fell to 1.4323 against the greenback, after advancing
to near a 2-year high of 1.4377 at 3:30 am ET. Continuation of the
pound's downward trading may see it challenging support around the
1.40 level.
Reversing from an early session's high of 0.8627 against the
euro, the pound fell to 0.8646 shortly after the data. The pound
may locate support around the 0.88 level, if it drops further.
Survey data from the Mannheim-based think tank ZEW showed that
German economic confidence declined sharply in April.
The ZEW Indicator of Economic Sentiment dropped to -8.2 in April
from +5.1 in March. The score was forecast to fall to -1.
Looking ahead, Canada manufacturing sales for February, U.S.
housing starts, building permits and industrial production for
March are scheduled for release in the New York session.
At 10:00 am ET, Federal Reserve Governor Randal Quarles will
testify on supervision and regulation before the House Financial
Services Committee in Washington DC.
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