Important events today:

07:00 UTC – MCK: Consumer Price Index GBP

13:30 UTC – MCK: Retail Sales Change USD

The GBP/USD pair is showing modest gains below the mid-1.2600s during the early Asian session on Wednesday. The pair’s gains may be limited due to lower-than-forecast UK wage growth and ongoing geopolitical tensions in the Middle East, which are putting some pressure on the British Pound (GBP). The Pound-Dollar pair is currently trading around the 1.2620 mark, having lost all of its gains for the day.

Data from the Office for National Statistics (ONS) showed on Tuesday that the ILO unemployment rate in the UK remained unchanged at 4.2% in the three months to November, in line with market expectations. Meanwhile, the number of people claiming unemployment benefits rose by 11.7k in December, following an increase of 0.6k in November. Finally, UK employment change data for November came in at 73k vs. the previous reading of 50k.

In addition, average earnings excluding bonuses fell to 6.6% from 7.2%, while bonus-adjusted earnings data grew at a slower pace of 6.5% vs. 7.2% previously, worse than the 6.8% forecast. The slower pace of UK wage growth in the three months to November supports the view that the Bank of England (BoE) will start cutting interest rates in the coming months.

Recommendations: Trade predominantly on Sell from the current price level