Can Pound find support in ILO employment report?

After rising substantially last week over short covering and weaker Dollar, Pound is again getting battered this week and so far declined close to 2% against Dollar. Pound is currently trading at 1.41 against Dollar.

Focus now will be on ILO employment report today, to be released at 9:30 GMT.

• As of now unemployment rate in UK stands at 5.1% and median estimate suggests it is likely to remain same.
   
• So major focus will be on earnings growth, since BOE policymakers in several instances announced they will be looking at wage growth component and current rate is not sufficient to generate targeted inflation. This component has gained sharply since last year, however slowing down in second half of the year. In last reading for three months’ wage growth to December has dropped to 1.9% including bonus and 2%, excluding it
   
• Today market is expecting marginal recovery in earnings growth by 0.1%.

Impact –

• Data, coming as expected, may not boost pound as substantial improvement is required to make the Brexit fear fade.
   
• However any wage growth above 2.4% excluding bonus likely to boost sentiment.
   
• While better data might pause selloffs, but mitigating it won’t be easy as weak inflation would keep weighing on rate decision.

Major focus will be over Bank of England’s rate decision tomorrow.

Pound in today’s trading is breaking below crucial support around 1.41 area.