Pound Unaffected By UK Employment Data; Fed Chair Powell’s Testimony Eyed

Pound Unaffected By UK Employment Data; Fed Chair Powell’s Testimony Eyed

23 Feb 2021 02:43 PM
 

Pound traded little changed around 1.4075 following the release of UK monthly employment figures.

The pair seems to have entered a consolidation phase, unaffected by positive UK jobs data. The unemployment rate rose 5.1% in December from 5.0% previous, in line with market expectations and was offset by a surprising drop in the claimant Count.

The number of people claiming unemployment benefits fell by 20K in January compared to market expectation of an increase by 35K. This combined with UK government's plan to ease lockdown measures and the progress in vaccination drive, continue to support the pair. Adding to this was the lowering prospects of faster US economic recovery weighing on the Dollar.

UK Prime Minister Boris Johnson unveiled a new four-step plan to end restrictions by 21 June and raised hopes for a swift UK economic recovery.

Going forward, US Consumer Confidence Index figures will be eyed by market participants. However, Fed Chair Jerome Powell's testimony before the Senate Banking Committee will be the key driver. Powell is expected to support accommodative policy stance, which could calm bond markets and further weigh on the Dollar­.