Pound Sterling ticks lower as UK Average Earnings cool down, BoE policy eyed

The Pound Sterling (GBP) trades lower against its major currency peers, but is 0.1% higher to near 1.3270 against the US Dollar (USD) during the European trading session on Thursday. The British currency has come under pressure as softer-than-projected United Kingdom (UK) Average Earnings data for the three months ending in January has diminished fears of persistent inflationary pressures.

Pound Sterling Price Today

The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the weakest against the Japanese Yen.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.02%	-0.02%	-0.33%	0.05%	-0.02%	-0.17%	-0.12%
EUR	0.02%		-0.01%	-0.35%	0.06%	-0.00%	-0.15%	-0.11%
GBP	0.02%	0.01%		-0.32%	0.08%	0.00%	-0.14%	-0.11%
JPY	0.33%	0.35%	0.32%		0.38%	0.30%	0.13%	0.22%
CAD	-0.05%	-0.06%	-0.08%	-0.38%		-0.06%	-0.23%	-0.18%
AUD	0.02%	0.00%	-0.01%	-0.30%	0.06%		-0.16%	-0.12%
NZD	0.17%	0.15%	0.14%	-0.13%	0.23%	0.16%		0.03%
CHF	0.12%	0.11%	0.11%	-0.22%	0.18%	0.12%	-0.03%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

The Office for National Statistics (ONS) reported in the early European trade that Average Earnings Excluding Bonuses, a key measure of wage growth, has arrived lower at 3.8% Year-on-Year (YoY) against 4.0% estimates and the prior reading of 4.1%. The key wage growth measure, including bonuses, dropped to 3.9% YoY from 4.2% in the three months ending in December.

The ILO Unemployment Rate remained steady at 5.2%, while it was expected to come in higher at 5.3%.

Investors brace for more volatility in the Pound Sterling as the Bank of England (BoE) is scheduled to announce its monetary policy at 12:00 GMT. The BoE is expected to leave interest rates unchanged at 3.75%, with a 7-2 majority, as the spike in oil prices amid Middle East conflicts has prompted fears that the UK inflation won’t return to the central bank’s 2% target anytime soon.

Meanwhile, the US Dollar trades broadly firm as the Federal Reserve (Fed) signaled on Wednesday that interest rate cuts are unlikely in the near term, with progress in inflation towards the central bank’s 2% target stalling.

“If inflation progress stalls, rate cuts will not follow,” Fed Chair Jerome Powell said in the press conference after the central bank left interest rates unchanged in the range of 3.50%-3.75% for the second time in a row, as expected.

Economic Indicator

BoE Interest Rate Decision

The Bank of England (BoE) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoE is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Pound Sterling (GBP). Likewise, if the BoE adopts a dovish view on the UK economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for GBP.