The British Pound is trading near $1.34, slightly above a recent four-week low. While UK labor market data showed stable unemployment but slowing wage growth, the Pound’s movement is also influenced by geopolitical tensions, particularly US trade policy and central bank independence. Investors are also awaiting upcoming UK GDP data for further economic insights.
- UK unemployment remained unchanged at 5.1% in the three months to November.
- Annual wage growth excluding bonuses slowed to 4.5%, the weakest since April 2022.
- US President Trump threatened additional tariffs on European countries, potentially impacting the UK.
- GBP/USD is rising toward 1.3500, seemingly ignoring UK jobs data, focusing on the EU-US conflict.
- The UK Office for National Statistics (ONS) is expected to show that the economy expanded 0.1% in November.
- BoE policymaker Alan Taylor expects interest rates to fall to their neutral levels soon.
- The US Dollar Index (DXY) is edging down, but remains close to its monthly high.
- Investors will focus on the US Producer Price Index (PPI) data for October and November.
- Global central bank chiefs have shown support towards Fed Chair Jerome Powell over his independence.
The Pound’s value is currently subject to a mix of domestic and international pressures. While domestic economic data presents a mixed picture, external factors such as trade disputes and central bank politics play a significant role. The currency’s future performance will depend on how these various elements interact and evolve.