On Wednesday, the GBP/USD pair is moving downwards; investors are analyzing reports on the employment.
The British Pound continues falling in the middle of the week. The current quote for the GBP/USD pair is 1.2417.
This afternoon, the United Kingdom published several statistical reports on the employment market. The Unemployment Rate in December remained the same, at 4.8%, but investors were upset by the components of this report. The Average Earnings Index (October - December) in the UK added 2.6% against expectations of 2.8%. This is probably the reason why Retail Sales and Household Spending readings were quite weak.
However, the Claimant Count Change in January decreased by 42.4K after being -20.5K in the previous month and against expectations of 1.1K. It’s rather strange that the Pound supporters didn’t focus their attention on this very report – with all else being equal, it might be based upon.
So, the labor market is still quite strong, but it appears that market players aren’t sure at all that the British people will remain solvent in the wake of the Brexit. No matter how you slice it, it's all about the process of London’s exiting the European Union. Overall, in 2016 the labor market in the United Kingdom stood its ground despite all stresses after the referendum and other troubles that followed. It’s true that at the end of the year salaries decreased, but the employment improved at the same time. Perhaps, fundamentally it’s more important than instant emotional reactions.
RoboForex Analytical Department