ILO unemployment likely to set mood for pound heading into FOMC

Pound's comeback after 9 days of consecutive slump to 1.516 against dollar is under threat as bulls are struggling to clear 1.55 key resistance area. Pound is currently trading at 1.534 against Dollar.

ILO unemployment reading to publish around 8:30 GMT today.

• As of now unemployment rate in UK stands at 5.6% and median estimate says it will remain so in today's reading.

• Once again major focus will be on earnings growth, which has gained sharply in last few reports, fuelling rate hike bets on Pound. Average earnings excluding bonus grew by 2.8% for three months to July and 2.4% including it.

• Today market is expecting earnings growth pretty high at 2.9% excluding bonus and 2.5% including it. Report may not live up to such high expectation.

Impact -

• Expectation miss would not necessarily weaken pound by large. Wage growth of above 2.5% would still be good enough. In that case, Pound is likely to find support around 1.527 area.
   
• However any wage growth below 2.3% likely to sour sentiment.
   
• Any major movement may not occur as FOMC rate decision is looming tomorrow.