EUR/GBP soars to 1-month high as UK wage growth slows down

The pound had a hard time as the UK labour market continued to improve, although wage growth came out weaker than expected.

Average UK weekly earnings ex-bonuses for June remained robust at 2.8% year-on-year, while including bonuses the figure disappointed and printed 2.4% and dipped from 3.2% previously. The unemployment rate for June stayed at 5.6%.

The jobless claims change for July decreased from 200 to -4,900, the Office for National Statistics advised on Wednesday. Sterling dropped as the results were somewhat weaker and the cross was seen at fresh daily highs at £0.7170, more than 1% higher on the day, but boosted mainly by the euro strength against the US dollar.

The divergence between monetary policies is there to stay, with the Bank of England possibly raising rates in the next six months, while the European Central Bank pledged to keep the QE amount at €60 billion a month until September. The latest bounce in price should be therefore used as a selling opportunity.