Pound Rises After U.K. Unemployment Rate Drops

(RTTNews) - The British pound strengthened against other major currencies in the early European session on Tuesday, as the U.K. jobless rate declined in the fourth quarter.

Data from the Office for National Statistics showed that the ILO unemployment rate fell to 3.8 percent in the fourth quarter from 3.9 percent in the prior period. The rate was also below economists' forecast of 4.0 percent.

In three months to December, average earnings including bonus rose 5.8 percent annually, slower than the 6.7 percent rise in November. Earnings growth was expected to ease more sharply to 5.6 percent.

Excluding bonus, average earnings advanced 6.2 percent annually after rising 6.7 percent in the prior period. The expected increase was 6.0 percent.

The claimant count increased 14,100 on month to 1.579 million in January.

The estimated number of vacancies declined 26,000 sequentially to 932,000 in three months to January. At the same time, payroll employees for January grew 48,000 on the month to 30.4 million.

In the Asian session today, the pound was held steady against its major rivals.

In the European session now, the pound rose to an 8-1/2-year high of 189.31 against the yen, from an early low of 188.44. On the upside, 190.00 is seen as the next resistance level for the pound.

Against the euro and the Swiss franc, the pound advanced to nearly a 6-month high of 0.8510 and a 2-1/2-month high of 1.1139 from early lows of 0.8536 and 1.1051, respectively. If the pound extends its uptrend, it is likely to find resistance around 0.84 against the euro and 1.12 against the franc.

The pound edged up to yesterday's high of 1.2656 against the U.S. dollar, from an early low of 1.2609. The next upside target level for the pound is seen around the 1.28 region.

Looking ahead, Germany's ZEW economic confidence survey results for January are due to be released in the European session.

At 5:40 am ET, ECB board member Anneli Tuominen will participate in roundtable high-level discussion at SRB Annual Conference 2024 "The road ahead: risk, readiness and resilience" in Brussels, Belgium.

In the New York session, U.S. CPI data for January and U.S. Redbook report are set to be published.