The Great Britain pound was the strongest major currency on the Forex market today. The reason for the sterling’s stellar performance was the employment report, which showed record employment among Britons.
Britain’s Office for National Statistics released an employment report for the September-November period of 2019. It showed that employment rose by 208,000, exceeding market expectations. As a result, the employment rate was at the record 76.3% level. The unemployment rate remained stable at 3.8%. Annual growth in average weekly earnings remained unchanged at 3.2%, whereas experts had expected it to slow a bit to 3.1%. Excluding bonuses, wage inflation slowed to 3.4% from 3.5%.
The positive data improved the outlook for monetary policy of the Bank of England. British policymakers have signaled recently about the possibility of an interest rate cut if data shows economic slowdown due to the Brexit and associated uncertainties. While markets still price in a more than 50% chance of a cut, the good employment report resulted in speculations that the BoE may delay its decision to gather more information before making a move.
Markit will release Purchasing Managers’ Indices for both the manufacturing and services industries on Friday. The indicators are considered to be a good gauge of economic health, therefore they can help to understand whether the British economy is indeed in such a good state as the employment report suggests.
GBP/USD rose from 1.3008 to 1.3046 as of 17:59 GMT today, touching the high of 1.3083 intraday. EUR/GBP dropped from 0.8527 to 0.8502. GBP/AUD jumped from 1.8916 to 1.9038.
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