Pound Spikes Up On Strong U.K. Labor Data, Brexit Delay Hopes

05:04, 19th March 2019

(RTTNews) - The pound strengthened against its key counterparts in the European session on Tuesday, as UK employment level climbed to a record high in the three months to January and a media report showed that European Union leaders are considering to grant a "contingent offer" on Brexit extension.

Data from the Office for National Statistics showed that employment grew by 222,000 persons to a record 32.71 million in the three months to January. Economists had forecast an increase of 120,000.

This was the largest rolling quarter-increase since the period September to November 2015, the ONS said. This is in contrast with the recent weakness in gross domestic product growth, especially given that real wages growth rates have been rising, the agency added.

The employment rate of 76.1 percent was the highest since the series began in 1971.

The unemployment rate eased to 3.9 percent. The rate has not been lowest since the three months to January 1975, the ONS said. Economists had expected the figure to remain unchanged at 4 percent.

The EU leaders are said to plan a "contingent offer" on Brexit extension, although it is unlikely to be finalized at the summit, Bloomberg reported, citing EU officials.

The plan would help May to try and pass deal through Parliament next week.

The currency has been trading in a positive territory against its major counterparts in the Asian session, excepting the yen.

The pound rose to 0.8533 against the euro, after falling to 0.8564 at 4:45 am ET. Next key resistance for the pound is seen around the 0.84 region.

Preliminary data from the ZEW - Leibniz Centre for European Economic Research showed that Germany's investor confidence rose sharply in March, reversing a steep fall in the previous month, to its highest level in a year.

The ZEW Indicator of Economic Sentiment for Germany rose to -3.6 from -13.4 in February, the Mannheim-based think tank said. Economists had forecast the index to rise modestly to -11.

The U.K. appreciated to a 5-day high of 1.3311 against the greenback, from a low of 1.3242 hit at 5:45 pm ET. The pound is poised to find resistance around the 1.35 region.

The pound reversed from an early low of 1.3253 against the franc, rising to 1.3305. Should the pound continues its uptrend, 1.34 is possibly seen as its next resistance level.

The pound edged up to 148.05 against the yen, reversing from a low of 147.52 seen at 7:00 pm ET. The pound is seen finding resistance around the 151.00 level.

Looking ahead, the U.S. factory orders and durable goods orders for January are slated for release in the New York session.