There's a limit to the Pound’s optimism. Overview for 18.01.2017

Quick growth of the GBP/USD pair yesterday couldn’t continue today, because there are more risks for the Pound than it would want.

The British Pound, which skyrocketed to its highs against the USD yesterday, is being corrected on Wednesday. The current quote for the instrument is 1.2291.

Today’s statistics showed that the Unemployment Rate in the United Kingdom in November remained unchanged, at 4.8%. The Average Earnings incl. Bonus over three months including November added 2.8% y/y, which is more than the expected reading of 2.6% y/y. The Claimant Count Change in December was ‑10.1K after being 1.3K in the previous month and against expectations of 4.6K. This is a good signal, which indicates that the economy is healthy and continues operating on a full scale even under the influence of the Brexit.

Yesterday’s growth was caused by the speech of Theresa May, the British Prime Minister. Generally speaking, she didn’t tell much positive information.  For instance, she said that the country wouldn’t try to keep access to the EU market and wanted to work out and conclude a free trade agreement instead. May also mentioned the immigration problem. According to her word, the United Kingdom was going to control the number of immigrants better in order to keep the country’s employment market under observation.

It’s neither good or bad – it’s quite difficult to understand where all this is going as long as the government didn’t start to act. However, it’s rather clear right now that without access to the European market, those British companies that are export-oriented are going to have a rough time. So far, possible complications of the Brexit are more significant than independence and self-regulation.

RoboForex Analytical Department