Change rose by 20.3K in Britain in August, less than around 35K that was expected. This smaller growth in jobless claims helped the pound jump against the greenback, but there’s little reason for celebration. This is still a big rise in claims.
The unemployment rate for July remained unchanged at 7.9%, as expected. GBP/USD is unable to break the 1.5780 line, which switched from support to resistance.
The chances of QE2 in Britain remain elevated, as unemployment continues rising, even if the current rise in August is not that bad. Only significant drops will put such a move off the agenda.
Last month’s rise in jobless was revised to the downside: from 37.1K to 33.7K. This is also slightly better. The related Average Earnings Index for July rose by 2.8% (annually), better than 2.7% that was expected.
Yesterday, inflation figures were slightly more firm than predicted. This helped the pair recover from the low line of 1.5780, but this was broken later.
Prior to this release, GBP/USD was trading under 1.5780, and even hit a new low of 1.57, last seen back in January. Further support is at 1.5650, followed by 1.5550. Resistance above 1.5780 is at 1.5910, followed by 1.60.
For more on the pound, see the GBP USD Forecast.
The pound is strongly affected by the troubles in the euro-zone: Greece is currently expected to receive the next tranche of aid, but the chances of default remain very high.
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