With the majority of this week’s influential UK data scheduled for publication today, Pound volatility is likely.
The British currency began the local session in a stronger position against peers like the Australian and US Dollars.
As trading progressed the Pound experienced minimal movement in response to the publication of UK employment data and minutes from the Bank of England’s latest policy meeting.
The employment report showed that the UK economy added 105,000 positions in the three months to January, down from a gain of 193,000 in the three months to December and slightly less than the 110,000 increase economists had forecast.
The unemployment rate held at 7.2 per cent, supporting the case for the BoE holding interest rates at record lows for the foreseeable future.
Meanwhile, UK jobless claims dropped by 34,600 in February in a 16th month of declines, considerably more than the expected fall of 25,000.
Weekly earnings, excluding bonuses, climbed by 1.3 per cent in the three months to January year-on-year. An increase of 1.2 per cent had been envisaged.
The employment report prompted this response from economist Samuel Tombs: ‘The recovery in the U.K. labour market appears to be slowing, implying that productivity may finally be starting to pick up. For now, we continue to think that the prospect of a prolonged period of below-target inflation will prompt the Monetary Policy Committee to keep interest rates on hold until late 2015.’
The minutes from the latest BoE policy meeting revealed that all members of the Monetary Policy Committee were in agreement regarding leaving policy unaltered.
The MPC also mentioned the downward pressure being applied to inflation by the strength of the Pound and intimated that further gains could occur, but voiced no particular warnings about this.
The minutes stated; ‘There were initial signs that the anticipated broadening from household to business spending might have already begun. Even so, there remained some way to go to ensure that the recovery was both balanced and sustainable.’
The Pound edged up against the US Dollar after the reports were released but movement was stilted ahead of the presentation of the UK budget by Chancellor of the Exchequer George Osborne.
With that still to come and the Federal Open Market Committee announcement on the horizon further Pound fluctuations could occur.
Pound (GBP) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,US Dollar,1.6624 ,
Pound Sterling,,Euro,1.1954,
Pound Sterling,,Australian Dollar,1.8235,
Pound Sterling,,New Zealand Dollar,1.9299 ,
US Dollar,,Pound Sterling,0.6016,
Euro,,Pound Sterling,0.8368,
Australian Dollar,,Pound Sterling,0.5479,
New Zealand Dollar,,Pound Sterling,0.5179,
[/table]
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