GBP/USD jumps above 1.2400 on upbeat UK labor cost data, Claimant Count soars

• GBP/USD has scaled above 1.2400 on better-than-anticipated UK Average Earnings data.
• CUK’s Claimant Count Change has increased by 28.2K and the Unemployment Rate has increased to 3.8%.
• The USD Index has slipped below 102.00 as investors are digesting fears of one more rate hike from the Fed.

The GBP/USD pair has climbed above 1.2400 as United Kingdom’s Office for National Statistics (ONS) has reported upbeat Average Earnings (Feb) data. Three month Labor cost index (excluding bonuses) has landed higher at 6.6% than the consensus of 6.2% but in line with the prior release.

The number of individuals who applied for jobless claims has jumped by 28.2K while the street was anticipating a decline of 11.8K. Three-month Unemployment Rate has jumped to 3.8% vs. the consensus and the prior release of 3.7%. An upbeat labor cost index might leave no other option for the Bank of England (BoE) than to hike rates further.

Contrary to that, UK Finance Minister was very confident about UK’s economic progress. UK Hunt cited that the British economy will outperform this year. Also, the economy will avoid recession.

S&P500 futures have remained choppy in the Asian session as investors s worried about quarterly results from banking and technology stocks, portraying a cautionary market mood. The US Dollar Index (DXY) has surrendered the crucial support of 102.00 as investors are digesting fears of one more rate hike from the Federal Reserve (Fed), which is expected to get announced in May.

Fed chair Jerome Powell eyes one more rate hike as United States core inflation rebounded in March, indicating extreme stubbornness due to the robust labor cost index. Meanwhile, retail demand for costly products has dropped as households are avoiding the higher cost of financing.