Pound Rises On Upbeat U.K. Employment Data

(RTTNews) - The British pound strengthened against other major currencies in the European session on Tuesday, following the release of the upbeat United Kingdom (UK) labor market data for the three-months ending June.

Data from the Office for National Statistics showed that the UK unemployment rate remained unchanged in three months to June.

The ILO jobless rate held steady at 4.7 percent in the second quarter, in line with expectations. Payroll employees for July decreased 164,000 from the previous year, and by 8,000 from June, to 30.3 million.

In three months to July, the estimated number of vacancies fell by 44,000 from the previous quarter, to 718,000. This was the 37th consecutive period where vacancy numbers have dropped compared with the previous three months, the ONS said.

Annual growth in employees' average earnings excluding bonuses was 5.0 percent in the three months to June period, which was faster than the expected increase of 4.7 percent. Including bonus, total earnings climbed 4.6 percent, data showed.

In June, about 38,000 working days were lost because of labour disputes across the UK.

European shares traded higher as the U.S. extended its pause on higher tariffs for Chinese goods until November 10, averting an immediate escalation in the trade war.

It is anticipated that positive job growth numbers will enable Bank of England (BoE) officials to stick to their "gradual and careful" approach to monetary expansion. With a narrow majority, the BoE lowered interest rates by 25 basis points (bps) to 4% last week.

In the European trading today, the pound rose to nearly a 2-week high of 0.8622 against the euro and nearly a 4-week high of 199.98 against the yen, from early lows of 0.8655 and 199.00, respectively. If the pound extends its uptrend, it is likely to find resistance around 0.85 against the euro and 201.00 against the yen.

Against the U.S. dollar and the Swiss franc, the pound edged up to 1.3472 and 1.0913 from early lows of 1.3421 and 1.0885, respectively. On the upside, 1.36 against the greenback and 1.10 against the franc are seen as the next resistance levels for the pound.

Looking ahead, U.S. NFIB business optimism index for July, Canada building permits for June, U.S. CPI data for July, U.S. WASDE report, U.S. Redbook report and U.S. monthly budget statement for July are slated for release in the New York session.