On Tuesday (January 21, 2025), the UK released labor market data that influenced GBPUSD movements.
Employment change was reported at 35,000 for November, falling short of the forecast from Trading Central which was 40,000, and significantly lower than the previous month’s figure of 173,000.
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At the same time, the unemployment rate for the same period was reported at 4.4%, which is above the forecast of 4.3%. Meanwhile, the average hourly wage growth over the three months leading up to November was 5.6% year-on-year, exceeding the forecast of 5.5%.
Following this release, GBPUSD experienced a decline, approaching the daily low of 1.22475.
This data indicates a deteriorating labor market, strengthening expectations that the Bank of England (BoE) will cut interest rates in early February. Additionally, market sentiment suggests that the UK central bank may reduce interest rates at least four times throughout this year.
Such expectations are putting further pressure on GBPUSD. It is worth noting that earlier today, the currency pair dropped by 800 points (80 pips) after US President Donald Trump announced plans to raise import tariffs to 25% on goods from Canada and Mexico.
This policy could potentially accelerate inflation in the United States, leading the Federal Reserve to proceed with caution regarding interest rate cuts. As a result, the US dollar gained strength, putting additional pressure on GBPUSD.
