Sterling Traders Focus on U.S. Inflation Amid Weak U.K. Jobs Data

Sterling Gains as Traders Look Past U.K. Jobs Data, Focus on U.S. Inflation

Sterling edged higher on Tuesday, rising 0.3% to $1.3210, as currency markets largely shrugged off the latest U.K. labor market report due to ongoing concerns over data quality. The report showed the unemployment rate ticking up to 4.5% and wage growth (excluding bonuses) slowing to 5.6% in the three months to March.

Despite these weaker-than-expected figures, market focus remained firmly on the upcoming U.S. inflation data, due at 1230 GMT, which could significantly influence global interest rate expectations. Analysts from Monex Europe warned that the data could pose further downside risk to the pound if it strengthens the case for the Federal Reserve to keep interest rates higher for longer.

Adding to the day's key events, Bank of England Chief Economist Huw Pill and Governor Andrew Bailey are scheduled to speak at 0945 GMT and 1600 GMT, respectively, potentially offering further insight into the BoE's monetary policy outlook.

Meanwhile, the euro slipped 0.1% against the pound to 0.8412, as broader currency markets await the outcome of the U.S. CPI release.