Pound slips on UK wage growth data
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Daily Currency Update
The pound has weakened this morning as UK wage growth missed forecasts. Compared to last year they were shown to have grown at 5.6%. This figure fell from 5.8% which was a slightly bigger drop than markets had been predicting.Wage growth has been an area of particular focus for the Bank of England given their rapid rise since the most severe pandemic lockdown restrictions were lifted in the UK with the Bank keen for them to continue to trend lower before they decide to cut interest rates. Simultaneously, the unemployment rate was shown to have unexpectedly ticked higher to 3.9% from 3.8%. GBP/USD is now back under 1.28 as a result, trading around one cent lower than the eight-month high it hit at the end of last week. GBP/EUR has fallen back to around 1.17 after getting as high as 1.1760 in very early trade yesterday. The next domestic data of note from the UK is tomorrow's monthly GDP reading which is expected to show the economy expanded 0.2% in January compared to December.
Key Movers
This week's main event is scheduled for release at lunchtime with the latest US CPI data due. The yearly figure is expected to hold at 3.1% with any deviation from this likely to cause some volatility for the dollar and equity markets. After a rapid decline, inflation in the States has held relatively steady since last July likely bolstered by the ongoing resilience of the US economy as it managed to ride out the wave of decades-high prices remarkably well. It's another quiet day from the Eurozone with nothing on the domestic calendar likely to move the shared currency. EUR/USD trades at 1.0925.Expected Ranges
- GBP/USD: 1.2720 - 1.2880 ▼
- GBP/EUR: 1.1665 - 1.1760 ▼
- GBP/AUD: 1.9260 - 1.9445 ▼
- EUR/USD: 1.0860 - 1.0980 ▲