Pound Rises Following U.K. Employment Data

(RTTNews) - The British pound strengthened against other major currencies in the European session on Thursday, following mixed employment figures from the United Kingdom.

Data from the Office for National Statistics showed that the U.K. unemployment rate rose unexpectedly in the three months to May. The jobless rate rose to 4.7 percent, while it was forecast to remain unchanged at 4.6 percent.

Payroll employment decreased 178,000 in June from the previous year, and by 41,000 from the previous month. Employment totaled 30.3 million.

The estimated number of vacancies declined 56,000 sequentially to 727,000 in the three months to June.

Including bonuses, average earnings increased 5.0 percent from the previous year in the three months to May, which was in line with expectations.

Earnings excluding bonuses also grew 5.0 percent, slightly faster than the expected growth of 4.9 percent.

Pay growth slipped from 5.3 percent to 5 percent, spurring hopes the Bank of England will cut interest rates next month.

European stocks traded higher, haling a four-day losing streak on optimism over a potential trade deal between the United States and the European Union.

The bloc is readying a package of tariffs to be levied on 72 billion euros' ($84bn) worth of goods against the U.S, if negotiations failed.

In the European trading today, the pound rose to a 3-day high of 0.8645 against the euro, from an early low of 0.8680. The pound may test resistance around the 0.85 region.

Against the U.S. dollar, the yen and the Swiss franc, the pound advanced to 1.3414, 199.39 and 1.0783 from early lows of 1.3375, 198.46 and 1.0739, respectively. If the pound extends its uptrend, it is likely to find resistance around 1.36 against the greenback, 200.00 against the yen and 1.08 against the franc.

Looking ahead, U.S. weekly jobless claims data, retail sales data, export and import prices for June, U.S. NAHB housing market index for July, U.S. business inventories for May and U.S. Philly Fed business conditions for July are slated for release in the New York session.