GBPUSD is trading near its highest level in six weeks
GBPUSD rose on Wednesday morning in the European session, and recorded the first daily gain, after stopping yesterday to trade near its highest level in almost a month and a half. These gains come after inflation rates rose to their highest level since March 2012, which increased expectations that the British Central Bank is close to tightening its monetary policy soon.
GBPUSD is on the rise
The GBPUSD pair traded at the level of $1.3838, up 0.25% from the opening level of today’s session at $1.3805, and it ended yesterday’s trading, losing about 0.25%, to record the first daily decline with the activity of corrections and profit-taking, after it recorded its highest level in six weeks at $1.3913 earlier in trading.
The British economy announced inflation data for the month of August. The data showed that the consumer price index in the United Kingdom recorded its highest level in nine and a half years at 3.2%, although the number was greatly boosted by the fundamental effects from the previous year, There have been big hikes in the prices of restaurants, hotels, entertainment, and cultural spending.
However, the 1.2 percentage point jump from the 2% headline annual rate recorded in the previous month was the largest since the CPI began in its current form in 1997.
Meanwhile, a rise above 3% also requires the Bank of England responsible for maintaining the 2% target rate to step in.
Labor market data
Data released by the Office for National Statistics on Tuesday showed that job vacancies in the June-August period jumped 35.2 percent to 1,034,000 from the May-July three-month period – 249,000 above the pre-pandemic level in January-March 2020.
All sectors of the industry contributed to the growth of job vacancies, with the number of jobs announced increasing to record levels, and the largest increase in accommodation and food services which recorded an increase of 75.4% with 57,600 new jobs created.
The unemployment rate fell in the last measured period between May-July to 4.6% from 4.9% in the three months between April and June, and the employment rate rose to 75.2% in the latest period from 74.7%.
The data has brought more evidence that the labor market stagnation is waning rapidly and that the labor shortage is contributing to faster core wage growth, and the significant increase in job vacancies, which is 27.5% above its pre-crisis level, indicates that the labor shortage is still Worsening, she added, this will increase the upward pressure on wages.
Professional Trader and Analyst, economist in Financial and Forex market since 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.