Pound Hovers Near Month Low
The British pound has failed to capitalize today against its US counterpart after the latest employment numbers from the UK hit the market, which may show that investors are more concerned with external data rather than local news
The unemployment rate released earlier today came in at 4.3 percent which is unchanged from last month and remains at a 43 year low while the average earnings figure rose by 2.9 percent which was in line with economists’ expectations.
Some say the earnings figure was strong enough to garner the interest of the Bank of England who may now decide that an interest rate hike later in the year may now be warranted.
“Labour market figures provide us with optimism that sustained rises in real pay are in prospect and will place more pressure on the MPC to hike interest rates soon. Indeed, employment rose by a whopping 197,000 in the three months to March, well above the consensus expectations of a 130,000 rise and the biggest quarterly rise since the end of 2015,” says Ruth Gregory, UK Economist with Capital Economics.
The good news may have been offset by retail sales figure from the US which were released after the employment figures coming in at 0.3 percent which was unchanged from last month and is positive enough to keep the US Federal Reserve on track a to continue raising interest rates this year.
Immediately after the British pound tumbled below the $1.35 mark and down towards the 4 month low that we saw last week.