U.K. Employment Data

• Average earnings with bonuses (Aug), fact 3.8%, forecast 4.0%.
• Claimant count change  (September), fact 21.1K, forecast 26.5K.
• Employment change, 3m/3m (m/m) (Aug), fact -56K, forecast 23K.
• Unemployment rate (Aug), fact 3.9%, forecast 3.8%.

The UK labor market slowed unexpectedly, showing rising unemployment and lower wage growth. At the same time, the number of applications for benefits decreased. But, given the slowdown in the labor market, this is a minor positive note. Of particular note is the average level of wages with bonuses, the slowdown of which can negatively affect the target growth of consumer inflation. It is also worth to note the growth in unemployment, which demonstrates the formation of upward dynamics.

Fig. 1. U.K. unemployment rate chart

Despite weak employment data in the UK, the British pound will maintain upward dynamic. The reason for the strengthening of the British pound remains the growth of optimism around the conclusion of the Brexit deal, which intensified after the EU representatives started talking about this possibility. As a result, the GBP/USD pair is trading near the level of 1.2700-10, actually indicating potential for growth, but is limited by the side channel and the preservation of political risks around Brexit.

Fig. 2. GBP/USD chart

Read also: “Currency is a weapon in a trade war!”

Hanzenko Anton

Earn with the help of the trade service on the news Erste News!

Topical articles of the trader’s blog:

1. Cloudy prospects for the  oil market 
2. Risks of global economic slowdown are escalating
3. What indicators choose Forex traders (Part 2)

Current Investment ideas:

1. One more opportunity to earn in October! Sell ​​#CAT shares now!
2. Several reasons to buy Cisco Systems, Inc. shares in October. Let’s earn Together!
3. Technology giant Microsoft is getting ready to storm new highs! Let’s make money on it!