Pound traders focused on wage growth figures

Philip McHugh April 16th 2019 - 2 minute read

The pound enjoyed a solid start to the session on Monday, helping to reverse some of the losses seen last week.

Sterling opens today’s session a little more subdued however, with GBP/EUR muted at €1.1571, GBP/USD flat at $1.3086, while GBP/CAD and GBP/NZD both hold steady at C$1.7533 and NZ$1.9368 respectively. Only GBP/AUD is showing any real movement so far this morning as it ticks up to AU$1.8308.

Coming up today is the release of the UK’s latest employment figures, with the pound likely to strengthen if domestic wage growth rose in line with expectations in February.

What’s been happening?

The pound got off to a robust start this week, edging higher against the majority of its peers, allowing the UK currency to recoup some of Friday’s losses.

This uptick appeared to be spurred by comments from UK Foreign Secretary Jeremy Hunt, who stated the cross-party Brexit talks between the Conservatives and Labour were more construction and detailed than some had thought.

Left directionless amid a lull in notable data, the euro struggled to hold its ground against the pound, leading the GBP/EUR exchange rate to drift up to €1.16.

Meanwhile, the GBP/USD exchange rate broke back pass the $1.31 barrier on Monday after the US dollar was shunned by a market than went risk-on following upbeat comments from US Treasury secretary Steven Mnuchin suggesting US-China trade talks are entering the ‘final round’.

What’s coming up?

Looking ahead, with Parliament in recess we may see the pound start to be more data driven this week, kicking off with the publication of the UK’s latest labour report this morning.

With unemployment expected to have held at four-decade lows, the focus will likely be on the accompanying earnings figures, with the pound potentially strengthening if wage growth accelerated in February as forecast.

Meanwhile, the euro could face some pressure this morning following the publication of the Eurozone’s latest economic sentiment index, with economists forecasting that household confidence will have fallen sharply this month.

Finally, the US dollar may fare better in today’s session in the wake of US industrial production figures that are forecast to reveal production growth accelerated for the first time in four months in March.

Written by
Philip McHugh

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