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Pound Sterling Rises Amid Falling Unemployment

The pound sterling rose against its major counterparts in the European session on Tuesday, as the UK unemployment rate unexpectedly fell between December and February.

Data from the Office for National Statistics showed that the unemployment rate fell to 4.9% in the three months to February. Economists had forecast the figure to rise to 5.1% from 5% in the three months to January.

At the same time, the employment rate dropped by 0.1 percentage points from the previous quarter to 75.1%.

The annual growth in the average wages of employees continued to accelerate. This growth was driven in part by a decline in the number and share of low-paid jobs.

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In the three months to February, average earnings including bonuses rose 4.5% year on year, while earnings excluding bonuses rose 4.4%.

In March, the rate of the number of applicants for unemployment benefits remained stable at 7.3%. The number of people claiming unemployment benefits has increased by 10,100 since February.

European stocks fell, retreating from record highs reached a day earlier as 30-year Treasury yields surged. In addition, new cases of Covid-19 have continued to rise across the globe, raising concerns about the gap between fundamentals and high stock valuations.

The pound sterling jumped to 1.2817 against the franc, its highest level in nearly two weeks. If the pound rises further, then 1.29 is likely to be seen as its next resistance level.

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The British currency also rose to nearly a 2-week high of 151.98 against the yen, compared to Monday’s close at 151.20. The 153.00 mark is possibly seen as its next resistance level.

Data from the Ministry of Economy, Trade and Industry showed that Japan’s tertiary activity rose for the first time in three months in February.

The Tertiary Activity Index rose 0.3% month-on-month in February, after falling 1.0% in January.

The pound fell to 1.4009, its highest level since March 4 against the US dollar. The pound is likely to meet a resistance level around 1.42.

Meanwhile, the pound sterling was down to 0.8634 against the euro, compared to Monday’s close of 0.8604. The pound is likely to meet support around 0.88.

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Destatis data showed that German producer prices rose in March at the fastest pace since the end of 2011, driven by higher prices for energy and intermediates.

Producer price inflation accelerated sharply to 3.7% in March from 1.9% in February. This was the largest increase since November 2011. economists had expected growth to 3.3%.

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