GBP\/USD fell on Tuesday, moving below 1.3600 and reaching about 1.3570. The move followed UK labour figures that pointed to softer conditions.<\/p>\n
The UK ILO Unemployment Rate rose to 5.2% in the three months to December, the highest in nearly five years, versus forecasts of 5.1%. The Claimant Count Rate increased to 28.6K in January from 2.7K in December, while employment change slipped to 52K from 82K.<\/p>\n
Wage growth eased, with Average Earnings Including Bonus at 4.2% year on year in the last three months of 2025, down from 4.6%. Forecasts had expected 4.6%.<\/p>\n
The data followed a weak UK GDP report released last week. It added to expectations of lower borrowing costs at the Bank of England\u2019s March meeting.<\/p>\n
A correction dated 17 February at 08:24 GMT stated the unemployment period was the three months to December, not to January. It also clarified that the 4.6% prior figure referred to Average Earnings Including Bonus, not Average Earnings Excluding Bonus.<\/p>\n
The latest labour data paints a concerning picture for the UK economy. With unemployment hitting a five-year high of 5.2% and wage growth slowing more than expected, we see clear signs of weakness. This trend was reinforced by last week’s report showing the economy contracted by 0.1% in the final quarter of 2025.<\/p>\n
These weak figures significantly increase the pressure on the Bank of England to cut interest rates at its March meeting. We are seeing market pricing, through overnight index swaps, now reflect over an 80% chance of a rate cut next month. This policy outlook contrasts sharply with the US, where recent robust jobs data has pushed back expectations for Federal Reserve easing.<\/p>\n
We believe traders should consider buying GBP\/USD put options with strike prices around 1.3500 or lower. An expiration date in late March or April would be strategic to capture potential downside following the upcoming central bank decision. This provides a direct way to profit from further pound weakness while limiting the initial risk to the premium paid.<\/p>\n
Looking back, this situation is reminiscent of other periods, such as in mid-2019, where a consistent string of poor data preceded significant sterling depreciation. As the March meeting approaches, we expect implied volatility on sterling options to increase. Establishing bearish positions now could be advantageous before that volatility becomes more expensive.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" GBP\/USD dipped below 1.3600 after UK jobs data showed rising unemployment, weaker wage growth, boosting rate-cut bets.<\/p>\n","protected":false},"author":62,"featured_media":17036,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42064","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42064","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=42064"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42064\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17036"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=42064"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=42064"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=42064"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}