Pound dips following weak UK jobs report

Yahoo

3 days ago

The pound dipped more than 0.4% against the dollar on Tuesday after a jobs report that showed a cooling UK labour market.
Sterling was just below the $1.35 mark, having sustained a rally in recent weeks as US president Donald Trump's tariff policy rocked markets and the dollar.
The UK labour market continued to cool in April, with the latest ONS figures showing unemployment at 4.6% and a 0.2% drop in payrolled employees — or 55,000 fewer jobs — from the previous month.
It marks the first time the unemployment rate has crept above pre-pandemic levels.
The data helps pave the way for the Bank of England to make further interest rate cuts, according to some analysts. The downturn in the employment market and a deceleration in wage growth has the potential to take the heat out of inflation in the rest of the economy, making it easier for the central bank to maintain its trajectory of lowering borrowing costs.
Read more: FTSE 100 LIVE: Stocks gain as US-China trade talks resume in London
"The trend in payrolls has been clear for some time now — even if the many have dismissed this," Sanjay Raja, senior economist at Deutsche Bank, said in a note. "The May payroll data may just be the peak in a long trending run of weaker labour market trends."
The dollar index (DX.Y.NYB), meanwhile rallied 0.2% as trade talks between US and Chinese diplomats continue for a second day in London. The pair are hoping to iron out terms on export controls for rare earths and other goods.
White House economic adviser Kevin Hassett said that the US was likely to agree to lift export controls on some semiconductors in return for China speeding up the delivery of rare earths, according to a Reuters report on Monday.
Sterling also fell 0.4% against the euro, trading just above the 1.18 mark.
Gold prices lacked direction on Tuesday, as the world watches for movement in US-China trade talks.
"[A] modest drop follows its safe-haven rally in response to Trump's incensed characterisation of the economy as 'a house of cards,' coupled with new protectionism on the trade front," said Aaron Hill, chief market analyst at FP Markets.
"Expectations of favourable trade talks ahead between the US and China, and hopes for relief from tariffs, have cooled bullion's gains.
Read more: Stocks: Create your watchlist and portfolio
"We believe this pullback is more of a rebalancing of positions in response to conflicting macro signals rather than trend reversal."
Gold futures were 0.2% lower to trade around the $3,349 mark, while gold's spot price was up 0.1%, around the $3,326.80 mark.
Oil prices moved higher for a second session on Tuesday morning, maintaining multi-week highs on hopes of a breakthrough in US-China trade talks.
Brent crude gained 0.2%, to trade at around $66.37. West Texas Intermediate was also up 0.2%, hitting $65.41 a barrel.
The moves partially retrace Monday's losses amid concerns around supply and the state of geopolitics.
The end of last week saw a rally for the viscose commodity, as US non-farm payroll data came in hotter than expected.
Read more: UK jobs data increase chances of more Bank of England interest rate cuts
This week investors are eyeing OPEC+ output decisions as well as ongoing trade discussions between the US and China.
OPEC+ production hikes are yet to translate into actual output gains, analysts at Morgan Stanley said.
In broader market movements, the UK's FTSE 100 (^FTSE) was 0.5% higher on Tuesday morning. For more details, on broader market movements check our live coverage here.Sign in to access your portfolio