When will the UK employment data be released, and what impact might it have on the GBP/USD exchange rate?

Summary of the UK Labour Market Report

The Office for National Statistics (ONS) is set to publish the latest UK employment data on Thursday at 07:00 GMT.

For February, the Claimant Count Change—a measure of people applying for unemployment benefits—is projected to decrease to 25,800, down from January’s figure of 28,600. The Claimant Count Rate stood at 4.4% in the previous month.

Average earnings, including bonuses, for the three months ending in January are anticipated to grow by 3.9%, slightly lower than the previous 4.2%. Excluding bonuses, wage growth is forecast at 4.0%, compared to 4.2% previously.

The ILO Unemployment Rate for the same three-month period may edge up to 5.3%, from 5.2% before. Employment Change in the last quarter showed an increase of 52,000 jobs.

Potential Impact on GBP/USD

If the UK jobs data aligns with forecasts, the effect on GBP/USD could be muted, as market participants are likely to focus on the Bank of England’s interest rate announcement later in the day. Escalating oil prices, driven by ongoing tensions involving Iran, have heightened inflation expectations in the UK and significantly reduced the chances of a rate cut in March. Before these developments, markets had priced in an 80% probability of a March cut. The voting split at the BoE meeting will be closely observed; a 6–3 result would indicate a more dovish stance than the anticipated 7–2 split.

The upward movement of GBP/USD may be limited, as the US Dollar could strengthen if the Federal Reserve adopts a more hawkish tone. At its March meeting, the Fed maintained interest rates at 3.50%–3.75%. Chair Jerome Powell remarked that although inflation is expected to decline gradually, the process may take longer than previously thought. He also noted that higher oil prices, linked to the Iran situation, are likely to push inflation higher in the short term.

From a technical perspective, GBP/USD is hovering near 1.3270. The daily chart shows the 14-day Relative Strength Index (RSI) at 38, indicating subdued momentum. Key support is found at the three-month low of 1.3218, reached on March 13. On the upside, resistance is seen at the nine-day EMA of 1.3323, with further resistance at the 50-day EMA of 1.3445.