Average earnings help the British Pound

After Monday’s awful eco-stats for the UK, analysts were hoping for some better numbers yesterday to recover some value in the Pound. Monday saw the worst monthly drop in Manufacturing output since 2002, along with a monthly GDP contraction of 0.4%. Tuesday’s figures carried a little more optimism after a good run this year for employment and earnings figures, and as expected the headline rate for unemployment remained at 3.8%. The average earnings figures however surprised to the upside, beating forecast of 3.1% with an actual result of 3.4%. Following the release Sterling was able to gain around half a cent against the Euro and US Dollar, recovering much of Monday’s drop.

Sterling exchange rates could very well be heading into a period of limited movements as key technical levels converge at a crucial time of uncertainty. Next week we will find out who the final runners are for the Conservative leadership, however beyond this we have 1 month until we find out the actual result and then 6 weeks until parliament return from recess in September to discuss Brexit progress ahead of the October 31st deadline. Anyone holding out for levels seen in March-May over the next few months could very well be left disappointed. For a more detailed analysis on likely currency ranges over the summer, contact your currency consultant today and we can recommend the best approach and tools to use to help maximise your exchange in this difficult market.

Today the news feed switches away from the UK and towards the US and Eurozone. Today we have 4 ECB member speeches beginning 9am this morning, followed by the latest inflation figures from across the pond this afternoon at 1:30pm. Analysts are expecting a small drop in the yearly figure from 2% to 1.9% once May’s figures a factored in.