Good news from the UK: the unemployment rate fell to 6% in August. Average earnings rose 0.9% (bonuses excluded) or 0.7% all in all. The figures came out better than expected. However, the more updated jobless claims for September fell less than expected, 18.6K.
The initial reaction is a rise in GBP/USD, that was edging higher already before the publication, but the move isn’t strong. Update: it seems that the more recent data has the upper hand, with cable struggling to hold above 1.59 after the initial rise.
The UK was expected to report another nice drop of 34.2K unemployed in September (Claimant Count Change). For the month of August, a drop in the unemployment from 6.2% to 6.1% was on the cards. Last but certainly not least, the Average Earnings Index (3 months rolling) was expected to rise by 0.7% after 0.6% in July.
GBP/USD was trading on low ground, around the round 1.59 line, after falling sharply yesterday.
Inflation fell to 1.2%, the lowest level in 5 years. This shifted rate hike expectations further into 2015, some say August, and it hurt the pound.
Support awaits at 1.5850 followed by 1.5720. Resistance is at 1.60, followed by 1.6050. For more, see the GBP USD forecast.
