British Pound Falls On Jobs Report, Bitcoin Rises
The British pound lost ground against the US dollar on Tuesday morning, dropping to the lowest level since August as a report indicated that the unemployment rate rose to 4.3% while wage growth also showed signs of easing. Economists suggested that the Bank of England (BoE) could continue to cut interest rates gradually.
In other news, Bitcoin hit a new record high, closing in on the $90,000 mark and drawing strength from Donald Trump’s promises regarding a more supportive environment for cryptocurrencies. However, his tariff-related rhetoric has generated market turmoil as analysts try to figure out his next steps.
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UK Unemployment Rises To 4.3%
According to data released by the Office for National Statistics (ONS) earlier today, the unemployment rate in the UK rose to 4.3% between July and September from 4.1% in the June to August quarter. The ONS, however, warned that the labour market figures should be treated with caution due to data collection issues.
The same report showed that average earnings excluding bonuses rose by 4.8% year-on-year, the lowest level recorded since the summer of 2022. Economists at ONS wrote in the accompanying report: “Growth in pay excluding bonuses eased again this month to its lowest rate in over two years. Job vacancies have fallen again, as they have been doing for more than two years now. However, the total still remains a little above where it was before the pandemic.”
Goldman Sachs Says Tariffs Could Impact Many Asian Economies
Tariffs continue to be a topic of conversation among analysts. In a note to investors, Goldman Sachs (GS) economists suggested that Donald Trump’s victory in U.S. elections could result in imposing tariffs not only on Chinese products. “With Trump and some likely appointees focused on reducing bilateral deficits, there is a risk that — in a sort of “whack-a-mole” manner--burgeoning bilateral deficits could eventually prompt U.S. tariffs on other Asian economies,” they noted.
GS suggests that “Asian trading partners might try to deflect attention in various ways e.g. by shifting imports towards the U.S. where possible.” It should be noted that Korea, Vietnam and Taiwan have seen large trade gains against the US according to official statistics.
Swiss National Bank Rate Cuts Not Locked
The Swiss National Bank (SNB) Vice Chairman, Antoine Martin, said that the bank has not promised to deliver any rate cuts in an effort to water down expectations for a rate reduction.
“It's not useful for central banks to lock themselves into forward-looking communications, since between now and the next decision, there may be changes in conditions that render current communications invalid,” said Martin adding “everything will depend on conditions when we assess the situation in December.”
The SNB is one of the pioneer central banks in lowering borrowing costs as it has cut interest rates three times this year. Economists expect the SNB’s board to proceed with another 25 basis points cut in December since inflation has hit a three-year low in Switzerland.
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