GBP price, UK unemployment data and analysis:
- UK labor-market data show a surprise fall in the claimant count measure of unemployment last month and an unexpectedly small drop in employment the month before.
- Yet, despite the better than expected report, GBP/USD continues to slide lower and EUR/GBP is still rising.
- Looking ahead, a measure of UK consumer confidence due Friday is the next data point to look out for.
GBP/USD near-term downtrend persisting
The near-term downtrend in GBP/USD, and the similar uptrend in EUR/GBP, are continuing after data showing that the rate of decline in the UK jobs market is slowing. The claimant count measure of unemployment dropped by 28,100 in June rather than rising by the 250,000 expected by analysts polled by the news agencies.
Similarly, employment in May dropped by 126,00 rather than the forecast 234,000 and the unemployment rate that month was unchanged at 3.9% when it had been expected to increase to 4.2%.
Still, the broadly positive report failed to lift GBP, which is continuing to slide lower against a USD that is underpinned by rising US-China tensions and persistent concerns about a possible second wave of the Covid-19 pandemic.
GBP/USD Price Chart, One-Hour Timeframe (July 10-16, 2020)
Chart by IG (You can click on it for a larger image)
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Similarly, EUR/GBP continues to trend higher ahead of a European Council meeting that starts tomorrow with a controversial EU recovery fund top of the agenda.
Meanwhile, the next UK data point to watch out for is the GfK measure of consumer confidence in July that is expected to show a mild recovery, with the market research company’s confidence indicator down 26 – better than June’s fall of 30.
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— Written by Martin Essex, Analyst and Editor
Feel free to contact me on Twitter @MartinSEssex