The British pound showing limited movement on Thursday. In the North American session, GBP/USD is trading at 1.3406, down 0.09% on the day.
Today’s UK employment report pointed to a cooling in the UK labor market. The number of employees on company payrolls dropped by 41 thousand in June after a decline of 25 thousand in May. Still, the May decline was downwardly revised from 109 thousand, easing concerns of a significant deterioration in the labor market.
Wage growth (excluding bonuses) dropped to 5.0% from a revised 5.3%, above the market estimate of 4.9%. The unemployment rate ticked up to 4.7%, up from 4.6% and above the market estimate of 4.6%. This is the highest jobless level since the three months to July 2021.
The latest job data will ease the pressure on the Bank of England to lower rates, as the sharp revision to the May payroll employees means the labor market has not deteriorated as much as had been feared. Still, the employment picture remains weak and the markets are expecting an August rate cut, even though UK inflation was hotter than expected in June.
US retail sales impress with 0.6% gain
US retail sales bounced back in June after back-to-back declines. Consumers reacted with a thumbs-down to President Trump’s tariffs, which took effect in April and made imported goods more expensive.
The markets had anticipated a marginal gain of just 0.1% m/m in June but retail sales came in at an impressive 0.6%, with most sub-categories recording stronger activity in June. This follows a sharp 0.9% decline in May.
The US tariffs seem to have had a significant impact on retail sales, as consumers continue to time their purchases to minimize the effect of tariffs.
Consumers increased spending before the tariffs took effect and cut back once the tariffs were in place. With a truce in place between the US and China which has slashed tariff rates, consumers have opened their wallets and are spending more on big-ticket items such as motor vehicles, which jumped 1.2% in June.
GBPUSD Technical
- GBP/USD is testing support at 1.3416. Next, there is support at 1.3399
- There is resistance at 1.3432 and 1.3449
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About the Author
Kenneth Fisher
Market Analyst
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities.
His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet.
Based in Israel, Kenny has been a MarketPulse contributor since 2012.
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities.
His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet.
Based in Israel, Kenny has been a MarketPulse contributor since 2012.
