Mixed U.K. employment data steers GBP/USD to 1.2900

Richard Adrian•Tuesday, July 11, 2023•1 min read

Newly released data from the Office of National Statistics indicates the rate of unemployment in the UK rose to 4.0% between May and June.

Analysts were anticipating less than 3.8% but the figures released on Tuesday indicate otherwise. In addition, the average number of individuals claiming jobless benefits increased from 22,500 in May to 25,700 in June.

In the United Kingdom (UK), Average Earnings came at 7.3% 3Mo/YoY May against an expected 7.1%. If we include bonuses, AE came at 6.9% 3Mo/YoY in June compared to 6.7% in May, and a forecasted 6.8%.

According to Forecasts, the UK must reduce inflation by at least 50%. This will not only grow the economy but also reduce economic inactivity, increase employment opportunities and enhance mortgage payments.

The release of this data has had a positive impact on the GBP/USD pair. Which saw the trading pair to 1.2900 after breaking resistance at 1.2800. If all goes well with GBP/USD, a psychological barrier lies at 1.3000, however, the bulls must first retest 1.2900 and form support. Meanwhile, there is immediate support at 1.2738 which will floor the price in case the bulls succumb to the 1.2800 selling pressure. A correction downwards to 1.2900 will expose the pair to further losses towards 1.2600.

GBP/USD’s positive perfomance is the result of higher economic rates in the U.K. against the backdrop of the weakening US dollar. However, we can expect the GBP/USD to continue with the upward momentum to test 1.30.

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ABOUT THE AUTHOR See More

Richard Adrian

Fintech UX Writer

Richard has 5 years of experience as a content writer in the fintech niche. Richard's main interest is in innovations and models that drive financial change, more particularly, domains around DeFi, Fund Management, blockchains, decentralized applications and blockchain gaming.