The British pound today rallied higher following the release of upbeat UK jobs data in the early London session despite the political uncertainty in the country. The GBP/USD currency pair’s rally was limited by investor fears that a pro-Brexit leader could succeed Theresa May as Prime Minister and push for a hard Brexit.
The GBP/USD currency pair today rallied from an Asian session low of 1.2668 to a high of 1.2728 in the mid-London session before retracing some of its gains then slowly inching higher.
The currency pair traded with a bearish bias in the Asian session driven largely by negative investor sentiment amid the UK leadership vacuum. However, the pair spiked higher following the release of the UK employment data for May, which beat expectations. According to the Office for National Statistics, the UK added 32,000 jobs on a 3-month basis in April, which was higher than the expected 10,000 jobs. Average weekly earnings also grew 3.1% over the same period beating expectations set at 3.0%, while the unemployment rate also met consensus estimates.
The cable was also boosted by Bank of England member Michael Saunders‘ speech who said that there could be further rate hikes after Brexit. Saunders is also a member of the BoE’s Monetary Policy Committee. However, the pair’s rally was limited by concerns over Boris Johnson’s candidacy given that he advocates for Brexit at any cost.
The cable’s future performance is likely to be influenced by UK political headlines and tomorrow’s multiple US releases.
The GBP/USD currency pair was trading at 1.2722 as at 16:31 GMT having rallied from a low of 1.2668. The GBP/JPY currency pair was trading at 138.06 having risen from a low of 137.49.
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