Unemployment figures boost sterling again
12 June, 2014
For the second day in a row the pound has been boosted by some better than expected economic data for the UK. On Tuesday industrial and manufacturing production was announced to be growing faster than originally expected, and yesterday the headline unemployment rate came down to 6.6% from 6.8% last month, and again better than the forecast 6.7%.
Sterling made gains against nearly of its major pairs following this announcement although gains were restricted and short lived as although unemployment is dropping, average earnings had also dropped 0.9% from 1.3% previously, maintaining the concern over individuals’ potential to keep up with the cost of inflation. Following this week’s movements GBP/EUR has now hit a new high for the year and the best buying levels since December 2012.
Overnight there were a few releases of note for the Antipodean currencies. New Zealand had their interest decision last night and announced a rate hike from 3% to 3.25% subsequently strengthening the kiwi dollar making it more expensive to purchase. Australia then followed with their latest unemployment figures where a increase to 5.9% on the headline rate was expected, but instead the rate was stagnant at 5.8%. The Aussie Dollar did however come under some pressure in overnight trading as their unemployment change posted a much worse figure than anticipated, seeing negative 4,800 against a positive 10,000 consensus.
Today is quiet for the pound which could very well see some profit taking from the current peaks, seeing a slide in exchange rates. At 9:00am we the monthly report from the ECB whilst their industrial production figures will be released at 10:00am. This afternoon the main US highlight is Retail Sales figures at 1:30pm.
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