Pound Spikes Up As U.K. Wage Growth Improves To 10-year High
December 11 2018 - 1:10AM
RTTF2
The pound strengthened against its major counterparts in the
European session on Tuesday, as U.K. jobs data showed that earnings
topped expectations in the three months to October, which was the
fastest pace of growth since December 2008.
Data from the Office for National Statistics showed that average
earnings including bonuses rose 3.3 percent year-on-year in the
three months to October after a 3 percent increase in the three
months to July. Economists had expected the rate to remain
unchanged.
Excluding bonuses, average earnings grew 3.3 percent
year-on-year following a 3.2 percent rise in the previous period.
The rate was forecast to remain unchanged.
The ILO jobless rate was steady at 4.1 percent in the three
months to October, in line with economists' expectations.
Investors cheered progress in trade talks after reports
suggested that Chinese Vice Premier Liu, U.S. Treasury Secretary
Steven Mnuchin and U.S. Trade Representative Robert Lighthizer have
discussed trade issues despite a diplomatic row over the arrest of
a senior Chinese businesswoman.
The currency held steady against its major counterparts in the
Asian session, barring the greenback.
The pound edged up to 1.2472 against the franc, after falling to
1.2422 at 5:00 pm ET. The pound is seen finding resistance around
the 1.26 level.
The pound appreciated to 1.2638 against the greenback, following
a decline to 1.2550 at 5:00 pm ET. The next possible resistance for
the pound is seen around the 1.28 region.
Reversing from an early low of 142.03 against the yen, the pound
rose to 142.93 following the data. If the pound rises further,
145.00 is possibly seen as its next resistance level.
Data from the Bank of Japan showed that Japan M2 money stock
rose 2.3 percent on year in November, standing at 1,010.5 trillion
yen.
That was shy of expectations for an increase of 2.6 percent and
down from 2.7 percent in October.
Having fallen to 0.9049 against the euro at 2:30 am ET, the
pound reversed direction and bounced off to 0.9006. The pound is
likely to find resistance around the 0.88 level.
Data from the Centre for European Economic Research showed that
German investor confidence rose strongly in December, defying
expectations for a modest weakening, but caution prevailed as
financial analysts' assessment of the current economic situation
again deteriorated sharply due to sluggish economic growth and
uncertainties linked to global trade and Brexit.
The ZEW Indicator of Economic Sentiment for Germany rose 6.6
points to reach minus 17.5 points in December.
Looking ahead, U.S. producer price index for November is set for
release in the New York session.
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