GBP bounces on UK unemployment data

Sterling got a fillip this morning from better-than-forecast UK employment data. The headline unemployment rate fell to 4.2%, an improvement on the market expectation of an unchanged 4.3%. The claimant count dropped by 20,400 in the month of September and job losses in the three months to September were only 82,000, as opposed to the market expectation of more than double that number. Hence, sterling made gains against the US dollar and euro in early trade. GBP/USD is up to $1.2260 this morning and the GBP/EUR rate is higher at just below €1.15. There is more to come this morning, in the form of productivity data and the composite, manufacturing and service sector purchasing managers indices. There is every chance that data will beat the forecasts as well. As so much recent UK data has. So further GBP strength cannot be ruled out.

Profit taking gives AUD and NZD a lift

The GBP/AUD and GBP/NZD rates hit a 5-week high yesterday, so it wasn’t surprising the buyers of Australasian currencies dived into the market. Inevitably, that caused a small correction. So GBP/AUD is down to AUD 1.9260. That is still roughly 4 cents higher than at the end of last month. GBP/NZD is down to NZD 2.0930, a full 6 cents up from the lows we saw at the end of September. The Aussie dollar, in particular, will be in the spotlight overnight when Australia releases consumer price inflation data for Q3. The market forecasts are mixed but a general softening of the pace of inflation is expected. That ought to weaken the AUD…as long as the forecasts are correct of course.