Average earnings excluding bonuses are expected to rise by 4.7% from 4.9% previously. Slower wage growth will increase expectations for further Bank of England rate cuts as it signals a further slowdown in the financial services sector. Conversely, higher wage growth will have a negative impact. Average earnings including bonuses are expected to rise to 3.9% from 3.8% previously reported.
Last week, the Bank of England cut interest rates by 25 basis points to 4.75% as expected. British Chancellor Andrew Bailey announced a gradual approach to easing policy and said the central bank was determined to reduce inflation to a healthy level above 2%.
Current value of the pound
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.59% | 0.37% | 0.65% | 0.30% | 0.10% | -0.01% | 0.43% | |
| EUR | -0.59% | -0.26% | 0.13% | -0.19% | -0.40% | -0.51% | -0.08% | |
| GBP | -0.37% | 0.26% | 0.30% | 0.06% | -0.14% | -0.26% | 0.14% | |
| JPY | -0.65% | -0.13% | -0.30% | -0.33% | -0.62% | -0.55% | -0.23% | |
| CAD | -0.30% | 0.19% | -0.06% | 0.33% | -0.15% | -0.32% | 0.08% | |
| AUD | -0.10% | 0.40% | 0.14% | 0.62% | 0.15% | -0.13% | 0.29% | |
| NZD | 0.01% | 0.51% | 0.26% | 0.55% | 0.32% | 0.13% | 0.41% | |
| CHF | -0.43% | 0.08% | -0.14% | 0.23% | -0.08% | -0.29% | -0.41% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Daily Market Changes: GBP weaker against USD
- The Pound Sterling drops to near 1.2900 against the US Dollar (USD) in North American trading hours on Monday. The GBP/USD pair declines as the US Dollar extends Friday’s recovery and aims to revisit a four-month high. The US Dollar Index (DXY), which gauges Greenback’s value against six major currencies, climbs above 105.30.
- The Greenback strengthens on expectations of higher investment and spending in the United States (US) as Republicans look set to take control of both the Senate and the House of Representatives, a scenario that would allow the Trump administration to implement fiscal policies quickly.
- The expected shift in government policy from higher tariffs to lower taxes would increase the U.S. budget deficit and inflation, a scenario that could force the Fed to opt for restraint. But Fed Chair Powell suspended hopes for the near-term impact of monetary policy after cutting interest rates by 25 basis points to 4.50%-4.75% last Thursday.
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This week, many Fed officials will comment on Thursday’s interest rate decision and monetary policy guidance at their final meeting in December. Investors will also be focused on the Fed’s comments as well as the U.S. Consumer Price Index (CPI) for October, which is expected to show annual inflation rising to 2.6% from 2.4% in September, with a core figure of 3.3%.
Technical Analysis: Pound Sterling slides below 1.2800
GBP/USD is trading near the breakout zone of the ascending channel formation. Short-term GBP/USD is still in a downtrend with the 20-day and 50-day exponential moving averages (EMAs) moving down to 1.3000 and 1.3035 respectively. However, the pair is still well supported by the 200-day exponential moving average (EMA) near 1.2860.
The 14-day relative strength index (RSI) is hovering around 40.00. If the RSI (14) fails to reach this level, the downtrend will continue.
Looking down, the August low of 1.2665 will be irrelevant for GBP bulls. On the bright side, GBP will face resistance near the psychological level of 1.3000.
