Sterling slides on stronger dollar, below-forecast United Kingdom wage growth

Brexit news

According to the AceTrader Research Team, "Today, y'day's break of last Fri's 1.2723 low to 1.2704 confirms MT fall has once again resumed, "bullish convergences" on hourly indicators are likely to limit downside to 1.2670/75 n minor sup 1.26236 would remain intact".

Still, the New Zealand Dollar has been unable to recover either due to many factors making investors hesitant to buy riskier trade-correlated currencies.

While Pound performance has improved since last week, the British currency isn't exactly strong either and its recovery has been highly limited due to considerable uncertainties and concerns regarding Britain's economic outlook.

"However, todays wage growth figures could undermine this, particularly with the increasing threat of a no-deal Brexit".

Uncertainties about how the Brexit process will impact United Kingdom businesses have been dampening United Kingdom economic activity for months already and these "no deal" Brexit fears have only worsened as next March's Brexit date approaches. At the time, the pound weakened significantly against all major currencies.

With investors seeking safe havens, riskier currencies like the New Zealand Dollar have been sold.

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Otherwise, the ongoing financial crisis in Turkey may continue to drive demand for United States dollars, as may the trade war between the USA and China, while GBP will be affected domestically by any major Brexit news. Following a sell-off in emerging market currencies towards the end of the week, the pound continued weakening against the USA dollar, but made gains versus the euro.

On top of this, last week's Reserve Bank of New Zealand (RBNZ) policy decision was surprisingly dovish to NZD investors, causing further weakness in the currency.

With wage growth slowing, an uptick in inflation could put Sterling under pressure. Monday's economic calendar is devoid of data for the United Kingdom, and traders are going to be focused on Brexit headlines for the day as well as the new Turkey developments.

The Office for National Statistics (ONS) reported that the UK's unemployment rate fell to 4% in June, its lowest levels since 1975.

The pound also fell versus the euro after earlier gains, and was down 0.1 percent at 89.340 pence per euro in late European trading.

The focus for GBP investors will now be on today's CPI figures, with an expected uptick in inflation potentially weakening the Pound as it suggests United Kingdom workers may be facing another fall in real wages.

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