The British pound weakened against the other major currencies in the early European session on Wednesday, as the slowing U.K. earnings growth in the three months through October weighed on the Bank of England’s rate hike prospectus.
Data from Office for National Statistics showed that U.K. earnings including bonuses increased by 2.4 percent from the same period of last year, slightly slower than a 2.5 percent rise forecast by economists. Excluding bonuses, earnings advanced 2 percent.
In November, the number of people claiming unemployment related benefits increased 3,900 from the prior month. It was expected to increase marginally by 800 from October.
However, U.K. unemployment rate declined in three months to October and the employment rate hit a record high. The ILO jobless rate came in at 5.2 percent in August to October period, which was below 5.3 percent seen in three months to September. It has not been lower since three months to January 2006, the ONS said.
Economists had forecast the rate to remain unchanged at 5.3 percent.
Meanwhile, the employment rate rose to 73.9 percent, the highest since comparable records began in 1971.
The claimant count remained stable at 2.3 percent in November, in line with forecast.
Investors await the outcome of the U.S. Federal Reserve’s two-day policy meeting due later in the day. The Fed is widely expected to raise interest rates for the first time in almost a decade.
In the Asian trading today, the pound held steady against its major rivals.
In the early European trading, the pound fell to an 8-day low of 1.4984 against the U.S. dollar and a 2-day low of 1.4829 against the Swiss franc, from early highs of 1.5057 and 1.4915, respectively. If the pound extends its downtrend, it is likely to find support around 1.49 against the greenback and 1.46 against the franc.
Against the euro and the yen, the pound dropped to 0.7289 and 182.82 from early highs of 0.7261 and 183.61, respectively. The pound may test support near 0.74 against the euro and 181.00 against the yen.
Looking ahead, U.S. housing starts and industrial production, both for November, U.S. crude oil inventories data and Markit’s flash U.S. manufacturing PMI for December are slated for release in the New York session.
At 2:00 pm ET, the Federal Reserve will announce its decision on monetary policy. The Fed is expected to nudge up the Fed rates by 25 bp rate, to a range of 0.25-0.50 percent.
Following the announcement, Federal Reserve Chair Janet Yellen will hold the customary post-meeting press conference at 2:30 am ET.
The material has been provided by InstaForex Company – www.instaforex.com