British Pound (GBP) Exchange Rate: Sterling Puts in Mixed Performance after UK Employment Data
The Pound began European trading struggling to recover losses inspired by yesterday’s surprising UK inflation report.
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While Sterling initially snapped its run of declines against the US Dollar and Euro, the currency went on to put in a very patchy performance following the publication of UK employment data.
The UK’s unemployment rate unexpectedly climbed to 7.2 per cent from 7.1 per cent in the three months through December as the British economy added 57,000 less positions than forecast.
However, weekly earnings excluding bonuses rose by 1.0 per cent in December rather than the 0.9 per cent expected and average weekly earnings climbed by 1.1 per cent, also more than forecast.
The Pound softened against the majority of its most traded currency counterparts after the figures were published.
Meanwhile, minutes from the Bank of England’s latest policy meeting showed that all nine members of the bank’s monetary policy committee were in agreement regarding leaving the key rate unchanged and the level of asset purchases unaltered.
Pound losses were not as extensive as they could have been however, as the minutes also referred to the UK’s bright economic outlook.
The minutes stated; ‘Reduced uncertainty, easier credit conditions and the simulative stance of monetary policy should support continued firm economic growth. Abroad, there had been modest upside news about the Euro-area economy and some amelioration of risks relating to the Euro-area periphery.’
Later today the GBP/USD pairing will come under additional pressure as the minutes from last month’s Federal Open Market Committee policy meeting are published. If the minutes stress that the Fed intends to continue with the slow and steady tapering of stimulus seen over the last two months the Pound could soften further against its American counterpart.
Tomorrow the UK’s CBI trends data could inspire some Sterling movement, although fluctuations in the GBP/EUR pairing are far more likely to be triggered by manufacturing/services PMI reports for the Eurozone and its largest economies.
The reports are expected to show a slower pace of contraction in France and more rapid growth in Germany and the Eurozone.