The British pound declines below the 1.25 mark

UK Unemployment rates rise to 4.3% and triggers a fall out of the pound

By Raed Alkhedr | @raedalkhedr | 13 September 2023

  • The average wage index in the UK rises to 8.50%.

  • The number of unemployment benefit claims rises to 0.9 thousand claims in August.

Economic events that influence movements in the British pound:

The British pound slipped against the US dollar, as the dollar regained strength ahead of CPI figures due in the US. Also, some not-so-great news came from the National Statistics bureau of the UK this morning. As they reported the unemployment rate in the UK rose to 4.3% for the three months ending in July, compared to the previous rate of 4.2% over the same period last year.

On top of that, there were about 0.9 thousand more people claiming unemployment benefits in August, following a big increase of 29.0 thousand claims in July.

When it comes to average wages in Britain, they did see a slight uptick, going from 8.2% in the previous quarter ending in June to 8.5%.

Meanwhile markets are waiting for some crucial economic data releases this week, with the main focus being on inflation data in the United States. People are paying close attention to these numbers because recent economic reports have raised concerns about the possibility of the Federal Reserve increasing interest rates.

The British pound lost ground against the US dollar, and now the currency pair is hovering around the 1.2460 mark.

Key technical levels that are expected to impact movements in the British pound against the US dollar:

The British pound attempted to rise and test the resistance level at 1.2550, but it failed to surpass this level and resumed its decline. It is likely to test the support level at 1.2450, and if it breaks below this level, the downward movement could extend to around 1.2300.

However, if the pair succeeds in rising above the resistance level at 1.2550, it may contribute to further upward movement, testing the upper limit of the descending channel at around 1.2620. If it successfully surpasses this level, the upward movement could extend to around 1.2750.