Forex News: Pound Rises Ahead Of U.K. Economic Data

Pound Rises Ahead Of U.K. Economic Data

(RTTNews) - The British pound strengthened against other major currencies in the European session on Monday, as investors await the release of the U.K.'s inflation and employment figures on Tuesday and Wednesday, respectively.

Investors turn their attention to the U.K. labor market data for the three months that finish in December.

The ILO unemployment rate in the U.K. is predicted by economists to have stayed stable at 5.1%, the highest level since January 2024.

A crucial indicator of wage growth, Average Earnings Excluding Bonuses, is predicted to have increased at an annualized rate of 4.2%, which is less than the previous figure of 4.5%.

Investors will be watching Wednesday's release of the Consumer Price Index (CPI) data for January for additional clues about the present status of inflation in the U.K. Inflation in the U.K. is expected to drop from 3.4% in December to 3% year-over-year (YoY).

For new clues about the U.S. interest rate forecast, investors will be watching Federal Reserve (Fed) Governor Michelle Bowman's address, later in the day.

Meanwhile, signs of weak employment demand and sluggish wage growth would raise expectations of interest rate cuts by the Bank of England (BoE). Also, the policymakers are certain that price pressures will return to the 2% objective in the second quarter of this year.

European stocks edged higher, though trading volumes remained thin amid a holiday in the United States for Presidents' Day. The mood in the market remained cautious with investors looking ahead to the minutes of the Federal Reserve's most recent monetary policy meeting.

In the European trading today, the pound rose to 5-day highs of 0.8687 against the euro and 209.69 against the yen, from early lows of 0.8700 and 208.50, respectively. If the pound extends its uptrend, it is likely to find resistance around 0.84 against the euro and 211.00 against the yen.

Against the U.S. dollar and the Swiss franc, the pound advanced to 4-day highs of 1.3662 and 1.0509 from early lows of 1.3636 and 1.0478, respectively. The pound may test resistance around 1.39 against the greenback and 1.07 against the franc.

Looking ahead, Canada housing starts for January and manufacturing sales data for December are slated for released in the New York session.

U.S. stock markets remained closed in observance of U.S. Washington's Birthday holiday.

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