Pound retreats on softer wages report but buyers poised still

Author: Mike Paterson | Category: News

Weaker than expected UK wages data sees the pound give up a few gains

GBPUSD on session lows of 1.3274 and EURGBP testing 0.9030 as a few longs run for cover.

Decent jobs data is largely irrelevant at this point but the BOE will want to recognize the improvement in their assessment with the MPC decision due tomorrow.

Rising employment but static wages growth and lagging further behind a rising inflation rate is not going  to get them pressing the hike button any time soon.

There is a common consensus though, and one I do share, that they and the Fed are both keen to get a couple of 0.25% hikes in to allow for wiggle room before the next crisis hits. We can not rule out a increase in the hawkish vote tomorrow and the algos will respond as ever.

So as we wait on that decision we can expect some caution to play out with GBPUSD demand expected into 1.3250 and more between 1.3220-30. Decent offers/res between 1.3330-50 should cap topside.

EURGBP has once again held the 0.8980 area that I highlighted yesterday and I see that pair in a 0.8975-0.9055 range for the moment.

Let's see what transpires.