Unemployment falls – but caution holds back GBP

Yesterday’s UK unemployment figures showed a drop to 2.34m people – a rate of 7.2%. But the Office of National Statistics said that the recent trend of improvements in unemployment appeared to be slowing slightly. Although the number of claimants dropped, the rate of 7.2% was higher than last month’s 7.1%, due to the way figures are calculated. Either way, the Pound did not take any strength from the news, unlike previous months where falling unemployment has improved exchange rates for sending money abroad.

In fact sterling fell through morning trading, as the Bank of England minutes were also released and showed a unanimous decision to keep interest rates at 0.5% and QE at £375bn.

The Chancellor has also warned that the UK recovery is “not yet secure”, as analysts start to turn towards next month’s Budget (March 19^th). Mr Osborne attends a G20 summit this week. Bank of England Governor Mark Carney has also called the recovery “neither balanced nor sustainable” this week, so perhaps it is no wonder that the Pound is struggling to go much higher particularly against the Euro.

The US Dollar however is still very weak giving excellent rates for sending money to the USA.

Today we have no crucial data out, although US inflation at 1.30 is always a potential mover of USD rates. Tomorrow morning then sees UK retail sales – will this week’s trend of caution prevail, bringing strife for the Pound? Call us at Currency Index for a free money-saving quote on your own transaction and a discussion of the options available to you.