Sterling moves to a two-week trough after UK labor data
Sterling declined in European trade on Tuesday against a basket of major rivals, resuming losses and almost touching two-week lows following UK labor data.
The data shows the UK labor sector is loosening, in turn reducing pressures on the Bank of England and boosting the odds of a rate cut next week.
The Price
GBP/USD fell 0.15% to $1.2714, with a session-high at $1.2741.
The pair closed up 0.1% on Monday away from a two-week low at $1.2688.
UK Labor Data
Earlier data showed the UK unemployment rate up to 4.4% in April from 4.3% in March.
Average wages rose 5.9% in April, above estimates of 5.7%.
UK jobless claims rose by 50.4 thousand in May, up from 8.4 thousand in the previous reading.
UK Rates
The data underpinned the odds of a UK 0.25% interest rate cut in June as markets now await mainline UK inflation data next week.
Aussie resumes losses after grim data
The Australian dollar resumed its losses in Asian trade on Tuesday against a basket of major rivals, approaching five-week lows against its US counterpart following grim data
A stream of weak Australian dollar underpinned hopes of early RBA interest rate cuts this year, in turn harming the Aussie’s standing.
The Price
The AUD/USD pair fell 0.3% today to 0.6591, with a session-high at 0.6613.
The pair rose 0.5% on Monday, away from five-week lows at 65.76 cents.
Grim Data
Earlier national data showed the NAB Australian labor conditions index down to 6 in May, missing estimates of 7, while the business sentiment index tumbled by 5 points to minus 3 in May.
Weak Growth Data
Last week’s data showed the Australian economy grew by 0.1% in the first quarter of 2024, below estimates of 0.2%.
Australian Rates
The data boosts the odds of a 0.25% interest rate cut by the Reserve Bank of Australia before the year end to underpin the economy.
Oil moves higher to a week high
Oil prices rose on Monday with gains expanding on the outlook of increasing fuel demand in the summer season.
Otherwise, Goldman Sachs’ analysts released a memo expecting Brent prices to rise to $86 a barrel in the third quarter.
They put an expected trading range between $75 and $90 for Brent prices this year.
On trading, Brent August futures rose 2.5%, or $2.01 to $81.63 a barrel, the highest since May 30.
US crude July futures rose 2.95%, or $2.21 to $77.74 a barrel, the highest since May 30.
Gold edges up as dollar trims gains
Gold prices rose on Monday as the dollar tapered off against most major rivals ahead of the Federal Reserve’s policy meeting.
Markets await important events this week, which include the Federal Reserve’s policy meeting this week, expected to maintain interest rates unchanged, with Fed Chair Jerome Powell talking later about the future of policies.
Markets also await US consumer prices data later this week, in addition to producer prices data.
Otherwise, the dollar index rose 0.2% as of 20:32 GMT to 105.1, with a session-high at 105.3, and a low at 104.9.
On trading, gold spot prices rose 0.2%, or $3.40 as of 20:33 GMT to $2328.5 an ounce.