UK Labor Market Data Boosts Rally in GBP/USD

Today’s economic calendar is heavy with key reports from Europe. The United Kingdom presented its statistics for evaluating the investment prospects of the pound sterling. In particular, market participants absorbed the UK labor market data. According to official reports, the average earnings growth remained unchanged at 2.5% annually in the three months to November. At the same time, the average earnings index excluding bonuses increased by 2.4%, which was the fastest pace in the past 2 years. Meanwhile, in December 8,600 Britons claimed unemployment benefits. This result failed to meet the expectations of the analysts who anticipated a slower increase in the number of unemployed people. However, the Claimant Count change decreased from the previous month. Additionally, the unemployment rate held steady at the lowest in 4 year level of 4.3%.

The pound sterling extends gains after the UK labor market data, despite a rise in the number of jobless claims. Investors were encouraged by the robust wages growth. Given weak expectations of the US economic statistics, the British currency has a chance to reach the level of 1.4150. Moreover, investors are waiting for the Bank of England policy meeting. The possibility of a rate hike is getting higher with every new published macroeconomic report, which provides support to the British currency.

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