Pound US dollar (GBP/USD) exchange rate fluctuates amid data-light morning
The pound US dollar (GBP/USD) exchange rate is trading without a clear trajectory this morning amid a lack of notable releases.
At the time of writing the GBP/USD exchange rate is trading at around $1.2636, virtually unchanged from this morning’s opening rate.
Pound (GBP) wavers amid easing employment concerns
The pound (GBP) is largely subdued this morning amid signs of easing in the UK labour market.
The British labour market has faced scrutiny throughout 2024, with unemployment steadily rising to an almost three-year high, as of this month.
Reinforcing these concerns is the latest data from online hiring platform Indeed, which has reported a slowdown in UK job listings this morning, reflecting the steady rise seen in UK joblessness this year.
Jack Kennedy, Senior Economist at Indeed, said:
‘The UK labour market has continued its adjustment in recent months, though it remains somewhat tight and still competitive for employers in many sectors.
Tackling inactivity, a longer-term skills strategy and the role of immigration in addressing labour shortages will be agenda items for the elected government.’
However, in addition to these findings, Indeed observes that wage pressures persist in the UK, with wage growth rising to a four-month high of 6.5% in May 2024, according to the Indeed Wage Tracker.
Amid a lack of high-impact UK releases, could signs of stubborn UK wage growth serve to buoy Sterling throughout today’s session?
US dollar (USD) fluctuates ahead of key data
The US dollar (USD) is wavering close to yesterday’s multi-week highs this morning, though appears largely subdued amid a lack of fresh releases.
The ‘greenback’ may see a volatile afternoon of trade ahead, with high impact releases relating to both US employment and industrial activity due out later today.
Markets will be closely monitoring the releases for any signs of economic softening, which could fuel a shift in Federal Reserve interest rate cut expectations.
Benjamin Schroeder, Senior Rates Strategist at ING, said:
‘Soft data has long been painting a bleaker picture than hard data and these data points will therefore be watched for signs that the cycle is indeed turning.’
While USD has enjoyed ongoing tailwinds from hawkish Federal Reserve rhetoric earlier in the week, signs of cooling for economic superpower may hamper the ‘greenback’.
Pound US dollar exchange rate forecast: US jobs data in focus
Looking ahead, the latest initial jobless claims report is due for release in the US. Economists expect the number of US citizens claiming unemployment benefits to have risen to have fallen slightly for the week ending 22 June.
The marginal dip to 236,000 could lend the ‘greenback’ some modest support amid signs that the US labour market remains relatively steady, offering the Fed more space to maintain a cautious stance towards monetary policy.
The latest durable goods orders are also due for release in the US this afternoon. Markets expect to see a significant decline in new orders in May, falling to -0.1%, which may subsequently weigh on USD exchange rates.
Looking to the UK, the Bank of England’s (BoE) latest Financial Stability Report is due for release this morning. Should the central bank express an upbeat view towards the UK’s financial system, Sterling could edge higher.