Sterling and the UK economy

Sterling had muted trading today (Tue 11 September 2018) and failed to capitalise on positive labour market data. The GBPUSD pair was flattish during the London session, hovering slightly above the important 1.30 level.

Earlier in the day, the UK unemployment rate stayed at 4.0%, while the claimant count change slipped marginally to 8,700 in August, down from 10,200 in July. Analysts had expected 10,000 for August.

Additionally, wage growth surpassed expectations and - including bonuses - accelerated from 2.4% to 2.6% year-on-year, while the ex-bonuses gauge also improved to 2.9% from 2.7% previously.

The Pound failed to strengthen after these good numbers, and the so-called cable dropped toward the 1.30 level.

However, sterling remained supported by the EU’s top Brexit negotiator,
Michael Barnier, who said on Monday this week that it would be realistic to achieve a deal with the UK in the next six to eight weeks. His comments helped the GBPUSD pair to jump beyond the psychological level of 1.30.

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