{"id":114938,"date":"2017-10-18T06:56:53","date_gmt":"2017-10-18T10:56:53","guid":{"rendered":"http:\/\/countingpips.com\/?p=114938"},"modified":"2018-06-01T15:55:33","modified_gmt":"2018-06-01T15:55:33","slug":"sterling-lower-ahead-of-uk-jobs-data","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/10\/sterling-lower-ahead-of-uk-jobs-data\/","title":{"rendered":"Sterling lower ahead of UK jobs data"},"content":{"rendered":"
October 18, 2017<\/div>
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Article by ForexTime<\/a><\/p>\n

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Investors who were itching for another opportunity to offload Sterling were given a thumbs up on Tuesday, after BoE officials sounded more cautious than anticipated during their testimony to Parliament.<\/p>\n

Although BoE Governor Mark Carney said the MPC believed a rate hike may be needed in the \u201ccoming months\u201d, his refusal to offer any clear signs on whether the central bank will take action in November, simply punished Sterling. Dovish signals radiating from the newest members of the bank\u2019s Monetary Policy Committee also played a role in the Pound\u2019s selloff, as investors started to question the prospect of an interest rate hike in November.<\/p>\n

With Bank of England\u2019s new deputy governor Dave Ramsden believing that a hike is not needed \u201cin the coming months\u201d and Silvana Tenreyro, suggesting that any move is \u201cvery contingent on data\u201d, November\u2019s MPC meeting could be dominated by doves. While markets still widely expect that the central bank will proceed with raising rates by +25 basis points in November, to quell inflation, the move may be considered as a dovish hike. With Britain\u2019s macroeconomic landscape still fragile amid Brexit, investors may not consider the hike as the beginning of a tightening cycle but simply, a \u201conce-off\u201d.<\/p>\n

While Carney maintained a safe distance from monetary policy discussion during the testimony to Parliament, he used the opportunity to express concerns over Brexit. With the Bank of England Governor warning that a \u201cno deal\u201d Brexit would have a negative impact on the economy, the British pound is likely to become even more sensitive to the Brexit negotiations.<\/p>\n

The main risk event for Sterling this morning will be the UK employment report, which will be closely watched for any signs of Brexit having a negative impact on wage growth. While Britain\u2019s unemployment rate is currently at a 42 year low, subdued wage growth continues to weigh on sentiment and is a headache for BoE policymakers. If average earnings fail to pick up, consumers are likely to feel the pinch further, especially after inflation hit a five and a half year high at 3% in September.<\/p>\n

Taking a look at the technical picture, the GBPUSD is under pressure on the daily charts. Prices failed to break above the 1.3300 resistance, resulting in a decline back towards 1.3150. Technical lagging indicators such as the MACD have crossed to the downside while prices are approaching the 50 SMA. A breakdown below 1.3150 may encourage a further decline lower towards 1.3050.<\/p>\n

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Disclaimer:\u00a0<\/strong>The content in this article comprises personal opinions and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/em><\/p>\n

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\"Forex-Time-Logo\"Article by ForexTime<\/a><\/span><\/strong><\/p>\n

ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Article by ForexTime Investors who were itching for another opportunity to offload Sterling were given a thumbs up on Tuesday, after BoE officials sounded more cautious than anticipated during their testimony to Parliament. Although BoE Governor Mark Carney said the MPC believed a rate hike may be needed in the \u201ccoming months\u201d, his refusal to […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-114938","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/114938","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=114938"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/114938\/revisions"}],"predecessor-version":[{"id":114946,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/114938\/revisions\/114946"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=114938"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=114938"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=114938"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}