Pound Drops After U.K. UK Employment Data; BoE Rate Decision Eyed

(RTTNews) - The British pound weakened against most major currencies in the European session on Thursday, following the release of the U.K.'s labor market data for January.

Data from the Office for National Statistics (ONS) showed that the ILO unemployment rate was 4.4 percent, unchanged from the previous figure and predictions.

The U.K. economy recruited 144K new workers, compared to the 107K new hires in the three months ended December.

Meanwhile, investors wait for the Bank of England's (BoE) interest rate announcement due later in the day. With a 7-2 vote split, the BoE is expected to maintain interest rates at 4.5 percent, due to tariff uncertainties and the British government's impending tax hike for employers. The Bank of England lowered borrowing rates by 25 basis points (bps) at its most recent policy meeting in February.

The BoE will release the meeting minutes along with the decision, and Governor Andrew Bailey will hold a press conference to explain the rationale for the action.

In the European trading today, the pound fell to a 3-day low of 192.51 against the yen, from an early high of 193.16. The pound may test support near the 188.00 region.

Against the U.S. dollar, the pound slipped to 1.2963 from an early near 4-1/2-month high of 1.3015. On the downside, 1.24 is seen as the next support level for the greenback.

The pound edged down to 1.1370 against the Swiss franc, from an early high of 1.1405. If the pound extends its downtrend, it is likely to find support around the 1.12 area.

Looking ahead, the Bank of England announces its monetary policy decision at 8:00 am ET. The BoE is likely to sit tight on rates today as inflation remains sticky. The nine-member policy committee is widely seen holding the rate at 4.50 percent in a split vote.

In the New York session, Canada PPI and raw material prices for February, U.S. Current Account data for the fourth quarter, U.S. weekly jobless claims data, existing home sales for February and U.S. Consumer Board's leading index for February are slated for release.