Another tough day yesterday for sterling saw it struggle across the board, except against the US dollar, following the release of disappointing labour data for the UK. With sterling movement largely driven by movements elsewhere this week, yesterday’s labour data report represented the first major economic data release from the UK this week. Expectations of a 2.8% increase in average earnings proved to be greatly optimistic, with wage growth falling to 2.4% over the previous quarter. Compared to the previous quarters increase of 3.2% and combined with an increase in UK unemployment of 25,000, this contributed to sterling’s struggles.
However, despite falling to the lowest levels seen against the euro for the past month, sterling was able to push higher against the US dollar as news from China weighed heavy on the world’s most widely traded currency.
Another quiet day lies ahead for the UK, with no fundamental data released. Elsewhere, retail sales and unemployment claims data from the US should provide some interest, while we could see a decision from the Greek government as they vote on the latest proposed bailout package. This, as well as events elsewhere, could continue to affect sterling performance today.