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GBP/JPY, GBP/RUB Decline as UK Wage Growth Lags Behind Inflation

November 15, 2017 3:50 pm | Modified November 15, 2017 3:50 pm
GBP, JPY, RUB | BY admin

The Pound to Japanese Yen (GBP/JPY) and Pound to Russian Ruble (GBP/RUB) exchange rates were trending lower in Wednesday’s European trading following lacklustre UK wage and employment data.

The UK’s Unemployment Rate remains at 4.3%, the lowest level in 42 years. Unemployment declined by 59,000 in the third quarter to reside at 1.42 million. On the year, the 2017 figure resides 182,000 fewer than 2016. Meanwhile, Average Earnings Including Bonuses came in at 2.2% on the year in September, down from 2.3% the previous month. Average Earnings Excluding Bonuses stagnated at 2.2%.

However, adding to the mix was the news that third-quarter employment fell by 14,000, the first fall since 2016.

Professor of Economics at Lancaster University Management School Geraint Johnes commented:

‘The latest labour market statistics show unemployment continuing to fall – by some 59,000 between the second and third quarters of this year. The unemployment rate now stands at 4.3%. The most recent fall, however, is due largely to a large increase in the number of people deemed economically inactive.’

In other news, the Society of Motor Manufacturers and Traders announced that used car sales dropped by 2.1% on the year in the July-September months. Continuations of sale declines could create Sterling losses in coming months.

Meanwhile, the Japanese Yen was offered some strength against Sterling when Japan posted growth in the July-September quarter – the seventh consecutive rise and the longest positive run in more than 10 years. Growth came in at 0.3% in the third quarter as exports increased. However, with other Group of Seven (G7) nations registering higher levels of expansion, Japan may be at the bottom of the pack.

In the same time period, Germany registered 0.8% growth, America achieved 0.75%, France and Italy both attained 0.5%, and the UK lagged behind at 0.4%.

Meanwhile, the Russian Ruble experienced its largest decline in over a year. The Russian currency registered a 2.5% loss versus the Euro (RUB/EUR) and a 1.5% stumble lower against the US Dollar (RUB/USD), on account of oil inventories increasing. Investors are carefully eyeing the oversupply in the market and high inventories. In addition, the RUB can be more delicate at this time of year on account of external debt payments and budgetary expenditures. However, despite this, the Ruble still managed to gain some ground against the Pound.

The Pound to Japanese Yen (GBP/JPY) exchange rate is trending at 148.8700. The Pound to Russian Ruble (GBP/RUB) exchange rate is residing at levels of 79.1983.

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