CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

GBP moves higher on labour data, EU summit crucial for pound

09:25 16 October 2018

Summary:

  • GBP trades as one of the top performing G10 currencies

  • Wage growth in the UK accelerated in August

  • Irish border and backstop among main hurdles towards forging Brexit deal

The British pound is trading higher on the day being one of the best performing G10 currencies at press time. GBP was boosted by good labour market data as well as more optimistic voices ahead of the tomorrow’s EU summit where Brexit will be one of the main topics on the agenda.

Start investing today or test a free demo

Open account Try demo Download mobile app Download mobile app

Both UK wage growth gauges moved higher in August beating economists’ expectations. Source: Macrobond, XTB Research

The UK labour market data was released at 9:30 am BST. Both earnings gauges surprised investors to the upside. Weekly earnings advanced 2.7% YoY in August while markets expected the gauge to remain at previous 2.6% YoY. Weekly earnings excluding bonuses were forecasted to remain at prior 2.9% YoY with actual data showing a pick-up to 3.1% YoY. The biggest increase was seen in the construction sector while wages in finance industry fell the most in comparison with July. It is worth to note that such a pace of wage growth (earnings excluding bonuses) was not seen in the UK since early-2009. However, while this may of course exert inflationary pressures within the economy it is unlikely that we will see any interest rate hike or cut anytime nearby as the Bank of England already announced it may wait until after the Brexit date. Other data included in the report showed unemployment rate remain at 4%, inline with expectations, and 3-month employment change at -5k (expected +15k).

GBPUSD launching the week with a downward price gap (orange circle) resulting from reports saying that Brexit negotiations were put on hold. GBP managed to regain some ground and close the gap as early as yesterday. Today’s data and new developments in Brexit case helped the pair overcome short term resistance zone ranging 1.3175-1.3185. Source: xStation5

The Brexit stalemate continues after negotiators from the EU and the UK failed to find solutions on issues like Irish border over the weekend. Markets thrilled after reports spurred saying that no additional talks will be held ahead of the EU summit that will begin tomorrow. Investors were concerned as the summit was viewed as an opportunity to work out a preliminary agreement that will be enhanced later on and eventually signed in November. However, some optimism can be seen among European leaders ahead of the summit. Namely, the French President Emmanuel Macron, who was one of the toughest EU leaders in the Brexit negotiators, said that he believes that “collective intelligence” will succeed and that talks that were halted on Sunday will be resumed. The UK Prime Minister Theresa May said that the shape of the agreement is clear in most cases with few hurdles remaining on the way. The two key hurdles that are seen as a major obstacles towards the deal are the Irish border and the so-called back stop. The first issues concerns the hard border on the isle of Ireland. Both parties disagree to bringing it up but a solution must be worked on how to deal with it once Northern Ireland and the Republic of Ireland will be become subjects to different customs regimes. One proposal to avoid Brexit crashing out because of this issue was to leave Northern Ireland under the EU customs union but PM May opposed this idea saying it would break to constitutional unity of the United Kingdom. The other proposal was to leave the whole United Kingdom under the EU customs rules for some time until proper agreement is worked out. However, this idea was opposed by the UK Brexit hardliners that insisted on providing a specific date when such backstop would end so the UK will not be left in the EU customs union indefinitely. As this two issues are major hurdles towards forging the deal investors should focus on news concerning the topics as they are likely to have the biggest impact on the GBP.

After few months of heavy selling the GBPUSD bottom in early-September and started to move higher later on. The pair is sensitive to Brexit developments so traders should pay attention to those when trading GBP tied FX pairs. The resistance zone ranging 1.3260-1.3300 may be the first stop for bulls. In case the pair falls subject to downward pressure the 23.6% Fibo level at 1.3170 may serve as the first support level. Source: xStation5

This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

Back
Xtb logo

Join over 1 Million investors from around the world

We use cookies

By clicking “Accept All”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.

This group contains cookies that are necessary for our websites to work. They take part in functionalities like language preferences, traffic distribution or keeping user session. They cannot be disabled.

Cookie name
Description
SERVERID
userBranchSymbol cc 17 October 2024
adobe_unique_id cc 16 October 2025
test_cookie cc 1 March 2024
SESSID cc 9 September 2022
__hssc cc 16 October 2024
__cf_bm cc 16 October 2024
intercom-id-iojaybix cc 13 July 2025
intercom-session-iojaybix cc 23 October 2024
xtbCookiesSettings cc 16 October 2025
xtbLanguageSettings cc 16 October 2025
TS5b68a4e1027
countryIsoCode
userPreviousBranchSymbol cc 16 October 2025
TS5b68a4e1027
_cfuvid
intercom-device-id-iojaybix cc 13 July 2025
__cfruid
__cf_bm cc 16 October 2024
__cf_bm cc 16 October 2024
_cfuvid
adobe_unique_id cc 16 October 2025
TS5b68a4e1027
_cfuvid
xtbCookiesSettings cc 16 October 2025
SERVERID
TS5b68a4e1027
__hssc cc 16 October 2024
test_cookie cc 1 March 2024
intercom-id-iojaybix cc 13 July 2025
intercom-session-iojaybix cc 23 October 2024
intercom-device-id-iojaybix cc 13 July 2025
UserMatchHistory cc 31 March 2024
__cf_bm cc 16 October 2024
__cf_bm cc 16 October 2024
__cf_bm cc 16 October 2024

We use tools that let us analyze the usage of our page. Such data lets us improve the user experience of our web service.

Cookie name
Description
_gid cc 9 September 2022
_gat_UA-22576382-1 cc 8 September 2022
_gat_UA-121192761-1 cc 8 September 2022
_ga_CBPL72L2EC cc 16 October 2026
_ga cc 16 October 2026
AnalyticsSyncHistory cc 8 October 2022
af_id cc 31 March 2025
afUserId cc 1 March 2026
af_id cc 1 March 2026
AF_SYNC cc 8 March 2024
__hstc cc 14 April 2025
__hssrc
_vwo_uuid_v2 cc 17 October 2025
_ga_TC79BEJ20L cc 16 October 2026
_vwo_uuid cc 16 October 2025
_vwo_ds cc 15 November 2024
_vwo_sn cc 16 October 2024
_vis_opt_s cc 24 January 2025
_vis_opt_test_cookie
_ga cc 16 October 2026
_ga_CBPL72L2EC cc 16 October 2026
__hstc cc 14 April 2025
__hssrc
_ga_TC79BEJ20L cc 16 October 2026
af_id cc 31 March 2025
afUserId cc 1 March 2026
af_id cc 1 March 2026
AF_SYNC cc 8 March 2024
_gcl_au cc 14 January 2025
AnalyticsSyncHistory cc 31 March 2024
_gcl_au cc 14 January 2025

This group of cookies is used to show you ads of topics that you are interested in. It also lets us monitor our marketing activities, it helps to measure the performance of our ads.

Cookie name
Description
MUID cc 10 November 2025
_omappvp cc 28 September 2035
_omappvs cc 16 October 2024
_uetsid cc 17 October 2024
_uetvid cc 10 November 2025
_fbp cc 14 January 2025
fr cc 7 December 2022
muc_ads cc 16 October 2026
lang
_ttp cc 10 November 2025
_tt_enable_cookie cc 10 November 2025
_ttp cc 10 November 2025
hubspotutk cc 14 April 2025
YSC
VISITOR_INFO1_LIVE cc 14 April 2025
hubspotutk cc 14 April 2025
_uetsid cc 17 October 2024
_uetvid cc 10 November 2025
_ttp cc 10 November 2025
MUID cc 10 November 2025
_fbp cc 14 January 2025
_tt_enable_cookie cc 10 November 2025
_ttp cc 10 November 2025
li_sugr cc 30 May 2024
guest_id_marketing cc 16 October 2026
guest_id_ads cc 16 October 2026
guest_id cc 16 October 2026
MSPTC cc 10 November 2025
IDE cc 10 November 2025
VISITOR_PRIVACY_METADATA cc 14 April 2025
guest_id_marketing cc 16 October 2026
guest_id_ads cc 16 October 2026
guest_id cc 16 October 2026
muc_ads cc 16 October 2026
MSPTC cc 10 November 2025
IDE cc 10 November 2025

Cookies from this group store your preferences you gave while using the site, so that they will already be here when you visit the page after some time.

Cookie name
Description
personalization_id cc 16 October 2026
UserMatchHistory cc 8 October 2022
bcookie cc 16 October 2025
lidc cc 17 October 2024
lang
bscookie cc 8 September 2023
li_gc cc 14 April 2025
bcookie cc 16 October 2025
lidc cc 17 October 2024
bscookie cc 1 March 2025
li_gc cc 14 April 2025
personalization_id cc 16 October 2026

This page uses cookies. Cookies are files stored in your browser and are used by most websites to help personalise your web experience. For more information see our Privacy Policy You can manage cookies by clicking "Settings". If you agree to our use of cookies, click "Accept all".

Change region and language
Country of residence
Language