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Pound Sterling Surges on Positive UK Employment Data; Eyes on Inflation as Trump’s Trade Policies Stir Uncertainty
Table of Contents
- 1. Pound Sterling Surges on Positive UK Employment Data; Eyes on Inflation as Trump’s Trade Policies Stir Uncertainty
- 2. Market Movers and U.S. Dollar Under Pressure
- 3. Pound Sterling Price Movements Today
- 4. What key indicators should investors be watching, and what are your expectations for the Pound in the coming months?
- 5. archyde Interview: Navigating the Pound Sterling’s Surge with economist Eleanor Vance
- 6. Introduction
- 7. Pound Sterling’s Recent Gains
- 8. Impact of U.S. Trade Policies
- 9. Looking Ahead
- 10. Final Thoughts and Audience Interaction
April 16, 2019
The Pound Sterling (GBP) demonstrated considerable strength against most major currencies on tuesday, buoyed by encouraging employment figures from the United kingdom. Data from the office for National Statistics (ONS) for the three months ending in February revealed a significant increase of 206,000 in employment, surpassing the 144,000 recorded in the previous period. This positive momentum, however, is tempered by concerns about upcoming cost increases for employers and the ever-present volatility of international trade relations, particularly those involving the United States.
While the overall employment picture paints a rosy scenario for the UK economy, analysts are carefully watching for signs that employers may become more cautious in their hiring practices. A key factor influencing this outlook is the increase in employers’ contributions to National Insurance (NI), which was raised from 13.8% to 15% in the Autumn budget by UK Chancellor of the Exchequer Rache Reeves.
Adding to the complexity, wage growth figures present a mixed picture. Average Earnings Excluding Bonuses rose by 5.9%, slightly below the anticipated 6%. Similarly, Average Earnings Including Bonuses saw a steady increase of 5.6%, falling short of the projected 5.7%.
These nuanced wage data points are unlikely to drastically alter expectations regarding the Bank of England’s (boe) monetary policy. The consensus remains that the central bank is likely to consider interest rate cuts at its May policy meeting, contingent on further economic indicators.
The U.S. implications for the UK’s monetary policy are considerable with both countries navigating similar economic uncertainties.For instance, if the U.S. Federal Reserve decides to maintain or cut interest rates, it could influence the boe’s decisions, especially considering the interconnectedness of global financial markets.
“I expect the risk of recession would outweigh the risk of escalating inflation, especially if the effects of tariffs in raising inflation are expected to be short-lived,”
Fed Governor Christopher Waller
Looking ahead, investors are keenly anticipating the release of the UK Consumer Price Index (CPI) data for March on Wednesday. Economists are predicting a stable core CPI growth rate of 3.5%, excluding volatile food and energy prices.
Market Movers and U.S. Dollar Under Pressure
- The Pound Sterling reached a six-month high near 1.3250 against the US Dollar during North American trading hours. The GBP/USD pair has been trading strongly,reflecting the ongoing pressure on the US Dollar.
- The US Dollar Index (DXY),which measures the Greenback’s value against six major currencies,traded cautiously,hovering slightly above its three-year low of 99.00.
- The US Dollar’s safe-haven status is being challenged by President Trump’s fluctuating trade policies.
- President Trump’s recent indications of a potential temporary suspension of tariffs on imported vehicles and related parts have added further uncertainty. “I’m looking at something to help car companies with it,” Trump stated, adding, “They’re switching to parts that were made in Canada, mexico and other places, and they need a little bit of time, as they’re going to make them here,” as reported by Bloomberg.
- On Monday, Fed Governor Christopher Waller supported monetary policy easing in the scenario of an economic recession despite inflationary pressures remaining escalated.
Pound Sterling Price Movements Today
The table below shows the percentage change of British pound (GBP) against listed major currencies today. British Pound was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.33% | -0.26% | 0.01% | 0.00% | -0.88% | -1.05% | 0.39% | |
| EUR | -0.33% | -0.58% | -0.37% | -0.31% | -1.13% | -1.36% | 0.08% | |
| GBP | 0.26% | 0.58% | 0.23% | 0.27% | -0.55% | -0.79% | 0.66% | |
| JPY | -0.01% | 0.37% | -0.23% | 0.05% | -0.81% | -1.14% | 0.42% | |
| CAD | -0.01% | 0.31% | -0.27% | -0.05% | -0.86% | -1.06% | 0.39% | |
| AUD | 0.88% | 1.13% | 0.55% | 0.81% | 0.86% | -0.24% | 1.23% |
