Sterling Falls On Weak Uk Jobs Data And Uncertainty Ahead Of Fed Decision

GBP/USD retreated after facing selling pressure around 1.2740 in London on Monday. The pair fell as weak UK employment data for the three months to April and expectations that the Federal Reserve will delay rate cuts kept the dollar strong.

The UK Office for National Statistics (ONS) released a report saying that the labor market contracted for the fourth consecutive time. The number of employed people fell by 140,000 in the three months to April, less than 177,000 in January-March. The ILO unemployment rate rose to 4.4%, higher than the expected 4.3%. The labor market data showed that companies are struggling to bear the consequences of the Bank of England (BOE)’s interest rate hikes.

Meanwhile, wage growth remained stable in February-April, with average earnings (excluding bonuses), an indicator of wage inflation, rising by 6.0%, in line with expectations and the previous value. In addition, average earnings including bonuses rose steadily by 5.9%, revised upward from 5.7%, higher than the estimated 5.7%. High wage growth may hinder the Bank of England’s interest rate cuts.

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