When are the UK wages and how could they affect GBP/USD?
UK Jobs report overview
The UK labor market report is expected to show that the average weekly earnings, including bonuses, in the three months to September, are expected to accelerate to 3.0%, while ex-bonuses also, the wages are seen steadying at 3.1% in the reported period.
The number of people seeking jobless benefits is likely to have increased by 4.3k in the three months to October, compared to a rise of 18.5k seen in the three months to September. The ILO unemployment rate is expected to hold steady at multi-decade lows of 4.0% during the period.
How could they affect GBP/USD?
A drop in the UK’s wages could trigger fresh selling the pound as market eagerly anticipate a Brexit deal in the coming days. The rates could test the 1.2828 (2-week lows) on downbeat numbers. A break below the last, a test of the 1.2800 level remains inevitable.
On upbeat readings, the GBP/USD pair could extend the bounce to test the 1.29 handle, above which the immediate resistances lie at 1.2946 (Nov 12th high) and 1.3000 (psychological resistance).
“The regular pay (excluding bonuses) is expected to increase 3.1% over the year in the three months to September period, confirming the strongest pay rise in the last decade. The total pay is also expected to accelerate to 3.0% y/y in three months ending in September, up from 2.7% y/y in the previous months. Strong pay increases reported in the October UK labor market report are set to support Sterling on the currency markets, as pay rise implication for inflation will see the Bank of England act on rate hiking front rather earlier than later”, Mario Blascak (PhD), Editor-in-Chief at FXStreet explains.
Key Notes
Market themes of the Day: UK wage growth is set to rise in support of gradual Bank rate rise
GBP/USD has a clear range amid the Brexit endgame, jobs report — Confluence Detector
UK: Mild upside risks to the unemployment rate - TDS
About UK jobs
The UK Average Earnings released by the Office for National Statistics (ONS) is a key short-term indicator of how levels of pay are changing within the UK economy. Generally speaking, the positive earnings growth anticipates positive (or bullish) for the GBP, whereas a low reading is seen as negative (or bearish).