GBP Pares Carney Gains On Political Concerns

Tuesday, July 17 – London Session Recap

During today’s London session, the main event was the UK’s latest employment report. The report was marginally disappointing with Claimant Count Change and Employment Change missing expectations.

Claimant Count Change printed at 7.8K versus consensus of -2.1K while Employment Change printed at 137K versus consensus of 150K.

All other data printed in line with expectations with the Unemployment Rate remaining at 4.2%. Although Average Earnings printed as expected, Average Earnings Ex-Bonus still slowed to 2.7% from 2.8% prior.

After the UK employment report, comments from Carney did give GBP a boost.  Carney stated that it’s possible for more financial services business from emerging markets to make up for any loss of EU activity.

Furthermore, Carney stated that the UK would be worse off if the UK used WTO trade rules. However, it’s premature for the BoE to make a judgement on the Governments Brexit white paper.

Since Carney’s comments, however, Brexit has once again come back into focus. According to The Guardian UK’s Labour party are backing a customs union amendment.

Furthermore, Labour is set to vote against an early recess in parliament. This would allow enough time for a challenge to PM May’s leadership.

Consequently, GBPUSD is trading back below the 1.32 handle while GBPNZD trades below the 1.94 handle.

For additional research, we’ve posted news articles from around the web below.

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