2023.10.1709:45:00UTC+00Pound Weakens As UK Earnings Growth Slows

The pound dropped against its major counterparts in European deals on Tuesday, as the nation's earnings growth slowed in three months to August.

Data from the Office for National Statistics showed that average earnings excluding bonuses grew 7.8 percent in three months to August. The rate came in line with expectations but slower than the 7.9 percent increase seen in three months to July.

Nonetheless, this was one of the highest annual growth rates since comparable records began in 2001.

Including bonuses, average total pay advanced 8.1 percent annually, weaker than the forecast of 8.3 percent. The total growth rate was affected by the NHS and civil service one-off payments made in June, July and August, the ONS said.

Another data showed that the number of job vacancies declined by 43,000 to 988,000 in July to September. Vacancies decreased by the 15th consecutive period and the level was the lowest since mid 2021.

The pound fell to 1.2149 against the greenback, 181.85 against the yen and 1.0965 against the franc, from its early highs of 1.2216, 182.73 and 1.0997, respectively. The next likely support for the pound is seen around 1.19 against the greenback, 178.00 against the yen and 1.01 against the franc.

The pound weakened to near a 2-week low of 0.8670 against the euro, from an early 4-day high of 0.8638. If the pound continues its fall, 0.88 is possibly seen as its next support level.

In the New York session, Canada housing starts for September, inflation data for September, retail sales data for September, U.S. industrial and manufacturing production for September, business inventories for August, U.S. NAHB housing market index for October and U.S. Federal budget balance report for September are set to be published.