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British Pound (GBP) Forecast: GBP Bid After Strong UK Jobs Market Data


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Jul 19, 2022 | DailyFX
Warren Venketas, Analyst

POUND STERLING TALKING POINTS

  • UK jobs data bolsters pound.
  • 4th round Tory leadership vote in focus.

GBP/USD Forecast: Sterling Shows Downward Pressure

GBP/USD FUNDAMENTAL BACKDROP

The pound began the European session on the front foot supported by strong UK labor data (see economic calendar below). Unemployment fell but growth in job vacancies (quarterly) are on the decline. UK companies are finding it harder to fill vacancies which could point to higher emphasis on staff retention but overall, the positivity around the UK jobs data print does give sterling some support amid an environment steeped in recessionary fears.

GBP/USD ECONOMIC CALENDAR

gbpusd economic calendar

Source: DailyFX Economic Calendar

 

From a Bank of England (BoE) perspective money markets are anticipating a 50bpsinterest rate hike in August with the worker shortage narrative playing into the hands of a more aggressive BoE in conjunction with a hawkish Federal Reserve.

The political situation in the UK has not really had much in the way of material impact on the pound so I do not suspect a change in trend as Tory voting continues. Rishi Sunak remains in pole position while the contest for second place intensifies with results scheduled around 1500BST later today.

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