GBP/USD Not Behaving as Expected
The pound, already down against the USD, was expected to fall even lower after the UK posted its latest unemployment numbers.
Unfortunately for traders, it fell neither low nor fast enough.
It’s a bit baffling because unemployment ended up at 5.1 percent, and wages have slowed well beyond what was expected. Since February, the average earnings (including bonus) was expected to grow by 2.4 percent, it ended up raising by only 1.8 percent.
When world economic powers face hardships and missed expectations like the UK is, that normally means they trade well against other currencies (like the USD). This was true for a while: The GBP fell against the USD initially over the weekend, but after experiencing the expected downturn, the GBP/USD rallied back.
Experts are now keeping a keen eye on the pair because if a surging U.S. dollar isn’t making the expected moves against a flailing Great Britain Pound, then how much faith can the rest of the world have in a seemingly positive greenback?
It remains to be seen if GBP’s surge against the dollar will continue through the rest of the week, but you can be sure that if the dollar continues to falter where it shouldn’t, the rest of the world will notice. If the world does notice this could seriously halt the progress the USD has made and could spark volatility in the market in the coming weeks.
As bad this news is for the country, it could be good news for traders. A volatile market is where money is made. Check out a FREE Forex webinar and let our experts teach you the ways you can profit no matter what state the U.S. dollar is in.