A stronger US Dollar and dismal economic data out of the UK helped to push the GBP/USD pair to below the $1.22 level in London trading. The greenback got a boost after Jerome Powell, head of the US Federal Reserve Bank, quashed speculation that the US central bank would consider a negative interest rate environment. A slew of UK data released yesterday confirmed worries about the state of the UK economy. Though the majority of data was not as dismal as analysts and economists had predicted, it was clearly bad enough to be a concern. Most notably, a preliminary analysis shows GDP fell to -2% in the first quarter of the year (on a quarter-over-quarter basis), slightly better than the -2.5% that had been expected. Industrial production was also weak at -4.2%, below an expected -5.6 for the month of March.
The GBP/USD was trading lower at $1.2216, a loss of 0.1373% as of 11:03 am in London; the pair is off the earlier low of $1.21807. The EUR/GBP was higher at 0.8847 Pence, up 0.713%; the pair has ranged from a trough of 0.88369 Pence to a high of 0.88718 Pence in today’s session.
Aussie Jobs Report Sends AUD Lower
In Australia, a report which showed the country lost jobs last month at what is now being recorded as the fastest pace in Australian history, has led FX traders and analysts to the conclusion that the Reserve Bank of Australia may need to step up its efforts. The Australia Bureau of Statistics reported that seasonally adjusted employment change in April fell to -594,300, far worse than the -575,000 that had been predicted. The Participation Rate was also worse than expected at 63.5%, below the 65.2% forecasts. The AUD/USD, as a result of the news, was lower at $0.6429, down 0.3579%, moving away from the session low of $0.64201.