Positive UK data pushes the pound higher

Sterling gained yesterday following the release of stronger-than-expected UK jobs report, GBPUSD moved from 1.2980 up to 1.3050. According to the Office for National Statistics (ONS), the UK Average Weekly Earnings (Including Bonus) recorded a growth of 3.2% during the three months to November as compared to consensus estimates pointing to a modest downtick to 3.1%. The gauge excluding bonuses came in at 3.4% as against 3.5% previous but was in line with market expectations.

Other details showed that the number of people claiming unemployment-related benefits fell to 14.9K in December. The strong data slightly dented expectations of an interest rate cut by the Bank of England at its upcoming meeting on January 30 and provided a modest lift to the British pound. However, the markets are still pricing in about a 60% chance of a 25 bps rate cut. Moving forward the markets will continue to look towards the Bank of England rate decision at the end of the month for guidance on Sterling. Should we see rates on hold we could see Sterling strengthen considerably in the aftermath.

EURUSD has remained fairly flat and continues to trade just below the 1.11 level. It is a data light day from Europe and the US markets await employment data tomorrow for any significant moves.

GBPUSD – 1.3046

GBPEUR – 1.1776

EURUSD – 1.1077

The figures are based on the live mid-market rate, correct as of 08:30 GMT on 22/01/2020, and are provided for indicative purposes only. Live mid-market rates are not available to consumers and are for informational purposes only. The rates we quote for money transfer can be selected via the page on our website ‘Live Money Transfer rates’.