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British Pound (GBP/EUR, GBP/AUD) Exchange Rate Jumps on Labour Data

March 19, 2019 8:17 am | Modified March 19, 2019 10:59 am
AUD, Brexit, Central Banks, EUR, GBP | BY Charlie Murray

The British Pound has been fluctuating mainly on Brexit in recent weeks, but today could see some further market movement on economic data. The UK Average Weekly Earnings, Employment Change, and Unemployment Rate data will be out this morning detailing how well the labour market performed in the three months through January on the year.

UK Labour Market Data Ahead – British Pound Trading in Tight Range

Economists expect UK Employment Change to rise by 120K, following the previous reading of 167K, while the Unemployment Rate remains on hold at 4.0%. Meanwhile, wage growth including bonuses is forecast to fall to 3.20% from 3.40%, while excluding bonuses the ecostat is expected to hold steady at 3.40%. Reports suggest that British businesses have been hiring rather than investing in technology given Brexit uncertainty, so this number has the potential to look good on paper.

UPDATE: The UK Unemployment Rate hit a 44-year low at 3.9%, with the number of people unemployed in the last quarter falling by 35,000. Average Weekly Earnings also continued to grow, despite Brexit uncertainty. The previous reading was revised higher to 3.5%, while the three months through January came in at 3.4%.

Last night, speaker of the House of Commons John Bercow ruled that Theresa May couldn’t bring her Brexit deal back to parliament for a third attempt to gain support, unless she made some significant changes. Now, Theresa May appears set to seek a long delay before Britain has to leave the EU.

Euro Exchange Rate Awaiting German and Eurozone ZEW Surveys

Meanwhile, economic data could also impact the Euro. The ZEW Eurozone and German Surveys for March are out today, and could be highly influential for the common currency. The German Expectations Survey is forecast to climb from -13.4 to -11.0, remaining firmly in contraction. Meanwhile, investors will be interested in whether the Eurozone Economic Sentiment Survey can recover from February’s -16.6.

Any further contractions could bode badly for the Euro to British Pound (EUR/GBP) and Euro to Australian Dollar (EUR/AUD) Exchange Rates.

RBA Meeting Minutes Cite ‘Significant Uncertainties’

Overnight, the Reserve Bank of Australia (RBA) released its latest meeting minutes. Some of the key points included the board noting ‘significant uncertainties’ over the economic outlook, policymakers being able to look ahead to scenarios when they may need to cut/raise rates, and a solid agreement among the board that there was no case for rates to move in the near-term. In addition, the Australian House Price Index contracted by -5.10% in the fourth quarter on the year, and the central bank said it saw a risk of ‘marked slowing’ in dwelling investment in the next few years.

The Australian Dollar may be more volatile on Thursday when the Australian Employment Change and Unemployment Rate data reaches markets, which may influence the AUD/GBP and AUD/EUR exchange rates.

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