Sterling Pound Drops on Risk Aversion Despite Positive UK Jobs Data

The Sterling pound today declined against the US dollar following the release of the latest UK jobs report in the early European session. The GBP/USD currency pair’s decline was largely due to risk aversion among investors reacting to the latest headlines in the Sino-US trade war.
The GBP/USD currency pair today declined from an Asian session high of 1.3087 to hit a low of 1.2964 in the mid-European session.
The currency pair’s decline coincided with the release of the latest UK labour market report by the Office for National Statistics, which was mostly positive. According to the report, average weekly earnings excluding bonuses rose by 2.9% in the three months to July beating expectations by 0.1%. The average weekly earnings including bonuses rose by 2.6%, which was higher than the expected 2.5%. The ILO unemployment rate remained stable at 4-decade low of 4.0%. The jobless claims came in at 8,700, while the new jobs created were 3,000 missing expectations by a huge margin.
The pound’s decline was accelerated by the news that China had requested the World Trade Organization for permission to impose new sanctions on the USA. The news triggered a risk-off sentiment among investors, which led to massive cash outflows from riskier currencies such as the pound and the euro. The news boosted the greenback as tracked by the US Dollar Index.
The currency pair’s future performance is likely to be affected by Brexit headlines and the Sino-US trade war developments.
The GBP/USD currency pair was trading at 1.2996 as at 13:30 GMT having dropped from a high of 1.3087. The GBP/JPY currency pair was trading at 144.73 having declined from a high of 145.93.

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