Pound Rallies on Brexit Hopes, Declines on Mixed UK Jobs Data

The  British pound today rallied higher and  recovered from a  3-day losing streak as  investors hoped for  a  breakthrough in  Brexit negotiations. However, the  lack of  any tangible progress in  the  Brexit proceedings and  the  mixed UK jobs report released today stalled the  cable’s rally.
The  GBP/USD currency pair today rallied from an  opening low of  1.2850 to  a  high of  1.2917 before retracing some of  its gains.
The  cable’s rally was initially attributed to  the  positive comments made by  British PM Theresa May yesterday when she claimed that Brexit negotiations were at  an  endgame. However, her optimism did not materialize into results as  the  Brexit negotiations did not result in any type of deal. Therefore, the  pair’s rally is seen as  a  relief rally or  a  pullback before resuming it’s long-term downtrend. The  release of  the  mixed UK labour market report by  the  Office for  National Statistics triggered the  pair’s decline as  the  number of  jobless claims in  the  UK jumped significantly.
According to  the  jobs report, average weekly earnings excluding bonuses grew by  3.2% beating consensus estimates set at  3.1%, but did not lift the  pair higher. The  higher ILO unemployment rate, which came in  at  4.1% instead of  4.0% and  the  higher number of  jobless claims, which were recorded at  20,200 versus the  expected 4,300 increase, also contributed to  the  pair’s decline.
The  cable’s future performance is likely to  be affected by  Brexit headlines given the  almost empty US docket.
The  GBP/USD currency pair was trading at  1.2899 as  at  10:48 GMT having rallied from a  low of  1.2850. The  GBP/JPY currency pair was trading at  147.15 having risen from a  low of  145.97.

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