The Pound (GBP) initially advanced against most of its peers on Wednesday following the release of better than expected UK unemployment figures.
Joblessness fell from 4.7% to 4.6% in March, reaching a 42-year low and suggesting that the uncertainty of Brexit was not putting off firms from hiring new talent. However, Sterling began to weaken again by the afternoon as investors digested the accompanying wage data which suggested that real pay is set to plummet this year.
The Pound may recover later this morning with the release of the UK’s latest retail sales as they are expected to rebound from -1.8% to 1.0% in April.
The uptick in the Pound Euro (GBP EUR) exchange rate proved to be short lived yesterday as the Eurozone’s CPI figures impresses investors, with inflation rallying from 1.5% to 1.9% last month.
The single currency was strengthened further this morning with the release of France’s latest employment data as the Jobless rate slid from 10.0% to 9.6% in the first quarter.
European Central Bank President Mario Draghi is set to speak later this evening, which could weigh on the Euro if he maintains his commitment to ultra-loose monetary policy despite the uptick in inflation.
Sterling continued to uptrend against the US Dollar (USD) on Wednesday as markets became increasingly concerned about the political situation in the US.
Following a number of mishaps, which included leaking classified data to Russia and the firing of the head of the FBI, there are fears about Donald Trump’s future, with some even talking of impeachment.
Meanwhile the ‘Greenback’ may stumble again this afternoon as the Philadelphia Fed Manufacturing Index is expected to fall from 22 to 19.5 in May.
The Pound was also able to maintain its gains against the Canadian Dollar (CAD) yesterday as oil prices were pressured by a smaller than expected decline in US crude stocks last week, with analysts suggesting that they were still major issues surrounding oversupply.
Sterling slumped to a new weekly low against the Australian Dollar (AUD) overnight on Wednesday as an unexpected fall in Australia’s unemployment rate from 5.9% to 5.7% in April helped drive the ‘Aussie’ higher.
New Zealand Dollar
The Pound New Zealand Dollar (GBP NZD) exchange rate plummeted from its best levels yesterday as investors soured on the UK’s latest employment figures as they fear that the slowing wage growth in the UK will lead to a decline in consumer spending over the coming year.
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