GBP Trades Lower as Weak UK Job Data Dampens Market Sentiment

The British Pound (GBP) is trading lower against the US Dollar (USD) on Wednesday, dropping 0.2% before the North American session begins. According to Scotiabank’s Chief FX Strategists Shaun Osborne and Eric Theoret, the Pound is trading defensively after disappointing labor market data.

UK Job Market Weakens

The GBP/USD pair faced renewed pressure after the latest UK jobs report showed slower wage growth, a rise in jobless claims, and a fall in overall employment. The data pointed to a cooling labor market, which has weighed on investor confidence.

The UK unemployment rate climbed to 5%, marking a new post-pandemic high and approaching the December 2020 peak of 5.3%. This weaker data suggests that the job market recovery is losing momentum.

British Pound trading defensively as unemployment hits 5% — GBP/USD analysis now.

Market Reaction and Rate Outlook

Despite the soft data, UK rate expectations have stabilized after an initial drop, and UK-US bond yield spreads have rebounded slightly. However, Scotiabank analysts note that the Pound’s earlier spread-driven gains have now faded due to the disappointing figures.

The report adds that the Pound Sterling is trading defensively, with traders staying cautious ahead of upcoming economic releases that could shape the Bank of England’s next rate decision.

Summary

• GBP/USD trades 0.2% lower amid weak UK jobs data.
• Unemployment rate rises to a post-COVID high of 5%.
• Market sentiment remains cautious as investors await policy clues.Make money without lifting your fingers: Start using a world-class auto trading solution.

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