Forex News: Pound Falls After U.K. Soft Jobs Data

Pound Falls After U.K. Soft Jobs Data

(RTTNews) - The British pound weakened against other major currencies in the European session on Tuesday, following the release of disappointing U.K. employment data.

Data from the Office for National Statistics showed that the U.K. unemployment rate remained stable in the three months to June. The unemployment rate stood at 4.9 percent in the June quarter, unchanged from the preceding period. The rate was seen at 4.8 percent.

The number of vacancies decreased 6,000 to 707,000 in the three months to July.

Average earnings excluding bonus logged an annual increase of 3.5 percent. Including bonus, earnings advanced 4.1 percent from the last year.

There were 47,000 working days lost because of labor disputes in June.

In July, payroll employment decreased 94,000 from the previous year and by 13,000 on a monthly basis to 30.3 million, data showed.

Traders await the U.K. inflation report due to be released on Wednesday.

European stocks traded lower, even as London's FTSE 100 may rise at open as oil prices continued to climb amid concerns over the prospects of a diplomatic resolution to reopen the Strait of Hormuz, a key route for global energy supplies.

U.S. stock futures ticked lower amid stalled Iran-U.S. diplomacy and ahead of earnings reports from retailers Walmart, Target and Home Depot due this week.

Traders also await minutes of the Federal Reserve's July policy meeting scheduled for Wednesday for additional clues on the outlook for interest rates.

In geopolitical news, U.S. President Donald Trump said that informal talks are taking place with Iran's Revolutionary Guard, but he is "not in a hurry" to make a deal.

Iran has announced reaching an understanding with Oman over the route for maritime traffic in the Strait of Hormuz.

Global bond yields are on the rise, with Japan's 10-year government bond hitting a three-decade high and Eurozone government bond yields hovering near their highest levels in more than 15 years, on concerns that renewed energy inflation could keep interest rates elevated.

In the European trading today, the pound fell to a 4-day low of 1.3520 against the U.S. dollar, from an early high of 1.3554. The pound may test support near the 1.33 region.

Moving away from an early near 3-week high of 216.22 against the yen, the pound dropped to 215.90. On the downside, 212.00 is seen as the next support level for the pound.

Against the euro and the Swiss franc, the pound edged down to 0.8559 and 1.0968 from early highs of 0.8547 and 1.0990, respectively. If the pound extends its downtrend, it is likely to find support around 0.88 against the euro and 1.07 against the franc.

Looking ahead, Germany ZEW economic sentiment index for August is due to be release at 5:00 am ET in the European session.

In the New York session, Canada housing starts for July, U.S. ADP weekly employment data, U.S. building permits for July, U.S. import and export prices for July, U.S. NY Fed services activity index for August, U.S. Redbook report, U.S. industrial and manufacturing productions for July, are slated for release.

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