The British pound strengthened against other major currencies in the European session on Tuesday, after data showed that U.K. unemployment rate dropped in the three months to July and the wage growth softened to a two-year low, signaling that the labor market conditions continued to cool.
Data from the Office for National Statistics showed that the unemployment rate fell to 4.1 percent in the three months to July from 4.2 percent in the preceding period. The rate came in line with expectations.
Annual growth in average earnings, excluding bonuses, was 5.1 percent in the three months to July, as expected, but weaker than the 5.4 percent posted in the prior period. This was the weakest since 2022.
Earnings including bonuses climbed 4.0 percent from a year ago, following a 4.6 percent rise in three months to June. This was also slower than the forecast of 4.1 percent.
Further, data showed that vacancies decreased on the quarter for the 26th consecutive period. The number of vacancies decreased 42,000 sequentially to 857,000 in the June to August period.
The British sterling held steady against its major rivals in the Asian trading today.
In the European trading now, the pound rose to 4-day highs of 0.8426 against the euro and 1.1122 against the Swiss franc, from early lows of 0.8448 and 1.1088, respectively. If the pound extends its uptrend, it is likely to find resistance around 0.82 against the euro and 1.14 against the franc.
Against the U.S. dollar, the pound advanced to 1.3108 from an early near 3-week low of 1.3058. The pound may test resistance near the 1.33 region.
The pound edged up to 188.11 against the yen, from an early low of 186.98. On the upside, 190.00 is seen as the next resistance level for the pound.
Looking ahead, U.S. Redbook report is slated for release in the New York session.