Pound Eases Despite Strong U.K. Wage Growth
September 11 2018 - 02:02AM
RTTF2
The pound retraced its early gains against its major
counterparts in early European deals on Tuesday, despite the
release of a data showing better than expected U.K. wage growth in
three months to July.
Data from the Office for National Statistics showed that average
earnings including bonuses grew 2.6 percent annually and earnings
excluding bonuses rose 2.9 percent. Earnings including bonuses were
forecast to rise by 2.5 percent and earnings excluding bonuses were
seen at 2.8 percent.
The unemployment rate came in at 4 percent in three months to
July. This was the lowest rate since February 1975.
The number of unemployed decreased by 55,000 from three months
to April to 1.36 million.
At the same time, the employment rate dropped marginally to 75.5
percent in three months to July from 75.6 percent in three months
to April.
In August, the claimant count rate rose to 2.6 percent from 2.5
percent in July. The number of people claiming unemployment
benefits increased by 8,700 from July.
The currency was higher early in the session following remarks
by EU Brexit negotiator Michel Barnier that it was 'realistic' to
expect a Brexit deal within six to eight weeks.
"If we are realistic, we are able to reach an agreement on the
first stage of the negotiation, which is the Brexit treaty, within
six or eight weeks," Barnier said at a conference in the Alpine
lake resort of Bled in northwestern Slovenia on Monday.
The pound eased to 144.73 against the yen, from near a 6-week
high of 145.92 hit at 3:15 am ET. The next possible support for the
pound is seen around the 142.00 level.
Data from the Ministry of Economy, Trade and Industry showed
that Japan's tertiary industry activity recovered in July.
The tertiary industry activity index edged up 0.1 percent on
month in July, in line with expectations, after declining by
revised 0.6 percent in June.
Having advanced to near a 5-week high of 1.2743 against the
franc at 2:30 am ET, the pound reversed direction and dropped to
1.2651. If the pound falls further, 1.23 is likely seen as its next
support level.
The pound retreated to 1.2989 against the dollar, following an
advance to near a 6-week high of 1.3087 at 3:15 am ET. The pound is
poised to find support around the 1.29 level.
After rising to near a 6-week high of 0.8888 against the euro at
4:30 am ET, the pound changed course and fell to 0.8938. On the
downside, 0.91 is possibly seen as its next support level.
Survey data from the Centre for European Economic Research
showed that German economic sentiment improved more-than-expected
in September.
The economic sentiment indicator climbed to -10.6 from -13.7 in
August. Economist had expected a modest improvement in the index to
-13.5.
Looking ahead, at 8:15 am ET, Canada housing starts for August
are set for release.
In the New York session, U.S. wholesale inventories for July
will be out.
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