POUND STERLING FACES PRESSURE AFTER DOWNBEAT UK EMPLOYMENT DATA

• The Pound Sterling slips as weak Employment data lifts up BoE rate cut hopes.
• UK Employment data for the three months ending January indicates weak labor demand and slower wage growth.
• Investors shift focus to US Inflation data and UK monthly GDP.

The Pound Sterling (GBP) drops to the round-level support of 1.2800 in Tuesday’s European session as the United Kingdom Office for National Statistics (ONS) has reported soft Employment data. Figures from the UK ONS show that higher interest rates from the Bank of England (BoE) and deepening cost-of-living crisis are starting to dampen labor market conditions.

The UK’s Unemployment Rate increased to 3.9%, employers fired 21K workers, and Average Earnings grew at a slower pace in the three months ending January. The labor market data clearly demonstrates uncertainty over the economic outlook, which could force BoE policymakers to start reducing interest rates earlier than previously expected.

Investors should brace for high volatility in today’s session as the United States Bureau of Labor Statistics (BLS) will report the Consumer Price Index (CPI) data for February. The inflation data will provide fresh guidance on the US interest rates outlook.