Close Preview x  
Close x
Expert Advisor Hosting Request

Please provide the following information:
(All Fields Required)

X My Account Secure Account Login Login

Close x
Online Security

Secure login
Ensuring the security of your personal information is of paramount importance to us. When you sign in to the trading platform, your User ID and password are secure.

The moment you click Login, we encrypt your User ID and password using 128-bit Secure Sockets Layer (SSL) technology.

Browser security indicators
You may notice when you are on our website that some familiar indicators do not appear in your browser to confirm the entire page is secure. Those indicators include the small "lock" icon in the bottom right corner of the browser frame and the "s" in the Web address bar (for example, "https").

To provide the fastest access to the trading platforms, we have made signing in to trading platforms secure without making the entire page secure. Again, please be assured that your ID and password are secure.

Close x

Privacy policy
Paltry wage growth weighs on the pound

Updated -  May 14, 2014 4:50:00 AM By Kathleen Brooks

The market is getting used to better than expected economic news out of the UK, which may be one reason why the pound sold off even though the UK’s unemployment rate for March fell to its lowest level since early 2009.

The good news

This morning’s labour market data showed a 25.1k fall in the number of people claiming jobless benefits, a 0.1% drop in the unemployment rate, a 283k increase in the number of people in employment between January to March, and an extra 722k people in employment in the last 12 months, which is the fastest rate since records began. There was even good news in the bad news: the number of unemployed has fallen by 309k in the last 12 months.

Wages: the weakest link

The most disappointing part of the report was wages; average weekly wage growth was 1.7%, disappointing expectations of 2.1%. If you exclude bonuses, wages actually slipped in March to 1.3% from 1.4% in February.  Although headline wage growth is still above CPI (1.6%), the fact that wages made no headway in March suggests that the recent increase was a flash in the pan, and not the sign of a sustained trend.

This slip in wage growth is significant as we wait for the BOE’s Inflation Report later today. The Bank has said that it will look at a broad range of measures of job growth, including wage levels, thus the fall in wages excluding bonuses, could negate some of the good news on the job creation front.

What it means for Carney:

Although economic growth and job creation are strong, the Bank of England may choose to focus instead on the weak wage growth, as the Bank’s only mandate is to maintain a 2% inflation target. With price growth a mere 1.6%, and wage growth disappointingly weak, the BOE may argue that it has to keep rates low for a prolonged period to ward off deflation fears. Depending on how the BOE reacts in its inflation report today, this could have big implications for the pound and UK rate expectations.

The outlook for the pound:

The pound fell on the back of the labour market report, and GBPUSD has made fresh lows of the day, it is now trading at its lowest level since 29th April. It is testing 1.6820 support right now, which has been resistance in the past. We need to hold this level on a closing basis to maintain a bullish bias in the short term. A daily close below here opens the way to further downside including the 50-day sma at 1.6724.

Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that is not rendering investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. is regulated by the Commodity Futures Trading Commission (CFTC) in the US, by the Financial Conduct Authority (FCA) in the UK, the Australian Securities and Investment Commission (ASIC) in Australia, the Financial Services Agency (FSA) in Japan, the Investment Industry Regulatory Organization of Canada (IIROC) in Canada and the Securities and Futures Commission of Hong Kong (SFC) in Hong Kong. Please read Characteristics and Risks of Standardized Options. Tweets

Not ready to open an account? Open a Free Practice Account OR Take a Guided Tour

Have more questions?

Chat Live Now or call 1 877 FOREXGO