Forex News: Pound Rises After U.K. Employment Data

Pound Rises After U.K. Employment Data

(RTTNews) - The British pound strengthened against other major currencies in the European session on Tuesday, following the release of positive U.K. employment figures for the three months ending December.

Data from the Office for National Statistics showed that U.K. unemployment rate remained unchanged in the fourth quarter. The jobless rate came in at 4.4 percent in three months to December, the same as in the preceding period. Economists had forecast the rate to rise to 4.5 percent.

In the three months to December, average earnings excluding bonus grew at a pace of 5.9 percent annually, in line with expectations. At the same time, including bonus, earnings advanced 6.0 percent compared to economists' forecast of 5.9 percent.

Data showed that payroll employees for January increased 21,000 from the last month and increased by 49,000 from the previous year to 30.4 million.

A strong momentum for wage growth would raise inflation expectations and compel the Bank of England (BOE) to maintain interest rates at 4.5%.

Meanwhile, the investors weigh the potential impact of higher U.S. tariffs and look forward to a key meeting on the Ukrainian conflict, bringing together American and Russian officials.

Saudi is hosting these talks without European leaders and President Zelenskyy.

Amid much uncertainty over trade and the monetary policy path, market participants also await further policy signals from Fed officials.

In the European trading today, the pound rose to more than a 2-week high of 0.8290 against the euro, a 5-day high of 1.1382 against the Swiss franc and a 4-day high of 191.95 against the yen, from early lows of 0.8309, 1.1364 and 191.11, respectively. If the pound extends its uptrend, it is likely to find resistance around 0.81 against the euro, 1.14 against the franc and 198.00 against the yen.

Against the U.S. dollar, the pound edged up to 1.2623 from an early low of 1.2593. The pound is likely to find resistance around the 1.28 region.

Looking ahead, Germany's ZEW economic confidence survey results for February are due to be released at 5:00 am Et in the European session. The economic sentiment index is expected to rise notably to 19.9 in February from 10.3 in January.

In the New York session, Canada CPI data for January, U.S. NY Empire State manufacturing index for February and U.S. NAHB housing market index for February are slated for release.

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