- The unemployment rate in the UK held steady at 4.7% in the three months leading up to July.
- In August, claims in the UK increased by 17.4K.
- The GBP/USD pair has reached a two-month high, surpassing 1.3600 after the employment data was released.
According to data released by the National Bureau of Statistics (ONS) on Tuesday, the UK’s ILO unemployment rate remained unchanged at 4.7% for the three months preceding July.
This result aligned with market forecasts.
The National Bureau of Statistics (ONS) is set to release the labor market report at 06:00 GMT on Tuesday.
Claims in the UK for August are projected to rise by 20.3K, reflecting an increase in those seeking unemployment benefits, following a decrease of 6.2K in July. Comparatively, claims represented 4.4% of the previous month.
Additionally, average earnings in the UK, including bonuses, are anticipated to grow by 4.7% over the three months to July, slightly up from 4.6%. However, excluding bonuses, wage growth is expected to drop to 4.8% from 5.0% previously.
The ILO unemployment rate for the UK seems stable at 4.7% for the three months leading to July.
Impact of the UK Employment Report on GBP/USD
The employment report has allowed traders to take a step back, shifting their attention toward the upcoming Consumer Price Index (CPI) and Retail Price Index releases on Wednesday. The Pound Sterling (GBP) is likely to receive support from cautious sentiments regarding the Bank of England (BOE) and its decision to maintain the interest rate at 4% during the monetary policy meeting on Thursday.
As the US Dollar (USD) weakens, the GBP/USD pair remains strong above 1.3600. There’s speculation that the USD might lower rates by 25 basis points in the scheduled September meeting. Traders are also keeping an eye on US retail sales data expected on Tuesday for August.
From a technical perspective, the GBP/USD pair is approaching a critical resistance level of 1.3788, the highest seen since October 2021. On the downside, it’s supported by a nine-day exponential moving average (EMA) at 1.3555, with a further support level at the 50-day EMA of 1.3485.
