Sterling Holds Ground After UK Jobs Data
- Feb 18
- 2 min read
GBP : Sterling holds ground after UK jobs data
The GBP/USD pair closed slightly higher on Monday and moved in a narrow channel just above 1.2600. The technical prognosis for the pair indicates that the short-term bullish tendency is unaffected.
In the three months leading up to December, the ILO Unemployment Rate remained stable at 4.4%, according to a report released early Tuesday by the UK's Office for National Statistics (ONS). This number was higher than the 4.5% market prediction. Additionally, compared to the 35,000 recorded for the preceding month, the Employment Change increased by 107,000 within this time frame. Lastly, the change in Average Earnings Including Bonus, which indicates yearly wage inflation, increased from 5.6% to 6%. These numbers appear to be supporting the pound sterling's continued strength versus the US dollar (USD).
In the meantime, while participating in a panel discussion titled "Preserving and enhancing open financial markets" at an event in Brussels on Tuesday, Bank of England (BoE) Governor Andrew Bailey acknowledged that they are in a period of heightened uncertainty and added that they are facing a weak growth environment in the UK.
EUR : Euro dented by dovish ECB
Following some dovish remarks made over the weekend by European Central Bank (ECB) policymaker Fabio Panetta, the euro (EUR) had a difficult start to the week. Panetta expressed concern that the bank will fall short of its 2% inflation objective because he believes that US tariffs will have a "limited, if not slightly negative," effect on inflation in the Eurozone.
After failing to hold above the psychological resistance of 1.0500 over the previous two trading days, EUR/USD drops to around 1.0450 in Tuesday's European session. As the US Dollar Index (DXY), which measures the value of the US dollar relative to six other major currencies, attracts bids near a two-month low and recovers to near 107.00 at the time of writing, the major currency pair declines.
The Greenback discovers buying interest as investors weigh in expectations that the Federal Reserve (Fed) will keep interest rates in the current range of 4.25%-4.50% for a longer period. On Monday, a slew of Fed officials stated that the monetary policy does not need to be adjusted in the current scenario.
USD : US Dollar quiet amid market closure
As American markets closed for the federal holiday of Presidents' Day yesterday, the US dollar (USD) was quiet. As a result, for the majority of the session, the "greenback" fluctuated within a small range.
There is a dearth of American economic statistics today. Therefore, the majority of USD movement may be driven by Donald Trump's remarks or risk appetite.
