Pound Spikes Up As UK Unemployment Rate Remains At 44-year Low

Date : 06/11/2019 @ 2:11PM
Source : RTTF2
Stock : Pound Sterling vs Japanese Yen (GBPJPY)
Quote : 134.5955  0.395 (0.29%) @ 8:10PM
Sterling vs Yen share price Chart

Pound Spikes Up As UK Unemployment Rate Remains At 44-year Low

Sterling vs Yen (FX:GBPJPY)
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2 Months : From May 2019 to Jul 2019

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The pound drifted higher against its major counterparts in early European deals on Monday, as a data showed that the UK unemployment rate remained stable in April at the lowest since 1974 and employment hit a record, pointing to continued strength in the labor market.

Data from the Office for National Statistics showed that the ILO jobless rate came in at 3.8 percent in three months to April, the lowest since end of 1974. The rate came in line with expectations.

At 76.1 percent, the employment rate was the joint-highest on record. The number of people in employment increased 32,000 to a record high of 32.75 million.

Average earnings, including bonuses, grew 3.1 percent year-on-year in three months to April, slightly faster than the expected 3 percent. Excluding bonuses, weekly earnings advanced 3.4 percent versus expected growth of 3.1 percent.

The U.K. economy is set to contract in the second quarter after stockbuilding ahead of the original Brexit departure date boosted growth in the first quarter, according to a report by the National Institute of Economic and Social Research.

The think tank forecast a 0.2 percent contraction in GDP in the second quarter.

The currency was also underpinned by risk appetite as hopes of more stimulus for China's slowing economy helped offset lingering worries about the U.S.-China tariff war.

The currency held steady against its major counterparts in the Asian session, barring the yen.

The pound appreciated to 0.8893 against the euro, from near a 5-month low of 0.8932 touched at 3:15 am ET. The pair had ended Monday's trading at 0.8917. Next key resistance for the pound is seen around the 0.86 level.

Survey data from the behavioral research institute Sentix showed that Eurozone investor confidence eroded sharply in June as a renewed escalation in trade tensions between the US and China hurt sentiment in the single currency bloc.

The investor confidence index for the euro area fell by 8 points to -3.3 from +5.3 in May. Economists had expected a score of +2.5.

After falling to 1.2670 against the greenback at 2:45 am ET, the pound reversed direction and reached as high as 1.2724. The pound is likely to find resistance around the 1.29 level.

The pound strengthened to 138.23 against the yen, following a decline to 137.50 at 5:15 pm ET. The next possible resistance for the pound is seen around the 140.00 level.

Data from the Bank of Japan showed that the M2 money stock in Japan was up 2.7 percent on year in May, coming in at 1,029.8 trillion yen. That follows the downwardly revised 2.5 percent increase in April.

The M3 money stock advanced an annual 2.3 percent to 1,361.7 trillion yen following the 2.2 percent gain in the previous month.

The U.K. currency climbed to a 4-day high of 1.2616 against the Swiss franc, reversing from a low of 1.2543 seen at 5:30 pm ET. The pound is seen finding resistance around the 1.29 region.

Looking ahead, the U.S. producer prices for May are due in the New York session.

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