Sterling declines after shocking UK labor data

Sterling fell in European trade against dollar, resuming losses after a hiatus yesterday away from two-week lows, following shocking UK labor data.

Sterling was the worst performing major G8 currency today, with prospects for a UK rate hike in June tumbling following the data.

GBP/USD fell 0.5% to 1.2465, with a session-high at 1.2532, after closing up 0.6% yesterday, the first profit in three days away from two-week lows at 1.2445.

The Worst Performing Major Currency

The pound took a major hit today following the UK labor data, which reduced inflationary pressures on Bank of England and bolstered prospects of a pause to policy tightening soon.

Data

Earlier UK data showed unemployment and jobless claims surging for another month in a sign of slower activities. 

Such numbers showed that tight labor conditions in the UK are starting to unravel, in turn relieving inflationary pressures on Bank of England.

BoE

The BoE pays special attention to the wages numbers to look for signs of slowing inflation, with recent data indicating that wages growth has already reached a peak and is starting to taper off. 

Such data bolstered the case of no change in monetary policies by Bank of England in June, in turn hurting UK treasury yields and the pound's standing against rivals.