The Pound rebounded from the bottom. Overview for 17.05.2022

GBPUSD is successfully moving away from its lows.

The Pound sterling continues recovering against the USD on Tuesday. The current quote for the instrument is 1.2458.

A short pause in the USD rally allows other traded currencies to reach stability or even recover a little bit. However, nothing really changes strategically.

Earlier today, the United Kingdom released the first of the two huge pieces of macroeconomic statistics planned for this week. First of all, the Unemployment Rate in the country was 3.7% in March after being 3.8% in February. The indicator wasn’t expected to change, so the actual reading might be considered positive. The Claimant Count Change showed -56.9K in April against the expected reading of -42.3K. The Average Earnings Index added 7.0% 3m/y after gaining 5.6% 3m/y the quarter before and against market expectations of 5.4% 3m/y.

The situation might be explained in the following way: in April, businesses and enterprises started feeling the negative external background, which only worsened the situation. However, they managed to save jobs and increase salaries adjusting for inflation. Probably, they might be able to hold this position for another quarter, but then the external pressure will come in full force. This, in turn, might lead to the disintegration of job and salary prospects.

The labour market, no matter how strong it may seem, didn’t completely recover after the pandemic – this process requires much time. one shouldn’t also forget about the Brexit issues – Northern Ireland turned out to be a sticking point in trade negotiations. In addition, interruptions in deliveries didn’t’ go anywhere. It appears that there are more complications than glimmers of hope and optimism right now. and that’s not good news for the Pound.