A Reuters poll of 64 economists shows that all expect the Bank of England to lift the bank rate by 25 basis points to 4.75% at their June 22 meeting (next Thursday).
- They also estimate that the bank rate is to peak at 5.0% in Q3. That was the same as May 31 poll.
Yesterday, the GBPUSD rose after better jobs data and hot wage data.
- In May, payrolls saw a change of 23k, compared to a decrease of 135k previously, which was revised to a 7k increase.
- The April ILO unemployment rate was reported at 3.8%, better than the expected 4.0%, and down from the previous 3.9%.
- Employment change for April stood at 250k, outperforming the expected 162k, and up from the prior 182k.
In terms of earnings,
- April’s average weekly earnings rose by 6.5%, higher than the expected 6.1% (3m/y) and up from the previously reported 5.8%, which was later revised to 6.1%.
- Average weekly earnings excluding bonus for April were reported at 7.2%, higher than the expected 6.9% (3m/y) and up from the prior 6.7%, which was revised to 6.8%.
With the US Fed likely on hold this month, the BOE policy expectation is good news for the GBPUSD.
Looking at the GBPUSD, it is testing the swing high from May 10 at 1.26790. The current price is trading at current session highs at 1.26806.
GBPUSD tests the May high
Taking a broader look at the daily chart below, a move above the 1.26798 level with momentum would have traders looking toward the 61.8% retracement of the move down from 2021 high. That level comes in at 1.27605.