GBPUSD was higher on Tuesday after better-than-expected jobs data from the UK. The United States also saw a more elevated inflation reading. The following data will be British consumer price inflation released on Wednesday.
GBPUSD – Daily Chart
The pound sterling has continued to find a bottom against the greenback and now trades at 1.1343. The following targets would be up to the 1.1400 and 1.1450 levels.
The pound rose 0.25% after the latest employment numbers showed a gain of 74k new jobs. That was better than the 40k that analysts had anticipated, but the unemployment rate stayed at 3.7%. The country also saw wages rise by 5.9%, down from 6.5% and the lowest since July 2022. This was also lower than the forecast of 6.2% and will please the Bank of England as it signals a cooling in the labour market as it battles inflation.
However, it will only please workers if the country sees its worst strike action since December 2011. The central bank will be waiting anxiously for the January inflation report, which will be released on Wednesday. Headline CPI is predicted to fall to 10.2%, down from 10.5%, but this is still very high and leaves the BoE little option to raise rates. Policymakers will meet again on March 22 and are expected to raise rates by another 25 basis points.
GBPUSD also got a boost from US inflation figures, which remained high but still dipped during the month. The indicator dropped for the seventh month, but prices climbed faster than hoped.
Inflation came at 6.4% in the 12 months to January, driven higher by higher housing, food, and energy costs. That was only slightly lower than the 6.5% in December. Officials at the Federal Reserve have said that it will take time to stabilize prices, despite some recent signs of improvement. Housing costs have been one of the key drivers of inflation, with a jump of 7%, which has been caused by higher rents.
Stock markets in the US fell slightly as traders had hoped for a more significant drop in inflation numbers.
