GBP Falls on rising unemployment

Daily Currency Update

The British Pound fell sharply this morning following the release of the latest UK Labour Market report. The Unemployment Rate unexpectedly rose to 4.8% in the three months to August, up from 4.7%. While average wage growth remains elevated, the rise in joblessness signals emerging weakness in the labour market. This weaker data increases the likelihood that the Bank of England could take a more cautious or dovish approach in the near term, putting renewed downward pressure on the Pound, particularly against the Euro and US Dollar.

In the Asia-Pacific session, the Australian Dollar found support after the release of the Reserve Bank of Australia's Meeting Minutes. The minutes indicated that the RBA Board saw "no immediate need for further interest rate adjustments" and expressed caution about the prospect of further easing. This slightly less-dovish message pushes back against recent market speculation for aggressive rate cuts, allowing the AUD to stabilize and firm up against its crosses, including the struggling Pound.