The pounds performance was boosted today following positive unemployment figures from the UK. The GBP/USD cross gained just over a cent throughout trading today (Wednesday) to reach a high of $1.5543, which takes as back to the same levels we witnessed towards the end of last week. For more information on live market rates click here.
Figures released this morning by the Office of National Statistics (ONS) showed unemployment in the UK had fallen by 4,000 and that 29,000 fewer people are now claiming Job-Seekers Allowance. The reports had an immediate impact on exchange rates with Sterling gaining nearly 75pips (3/4 of cent) against the dollar to take the mid-market price from $1.5425 to just under $1.55
Although many would have been hoping for a bigger drop in the unemployment figures I think todays report will still be seen as a major plus for the UK economy. The last thing we would have wanted to see was a rise in the number of people out of work, especially as it was only a week ago Mr Carney delivered his long term plans for unemployment to fall to 7% before the central bank looks to change interest rates.
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There were further gains for Sterling in the afternoon as the U.S released a string of poor PPI data which pushed exchange rates up again with the mid-market price climbing towards $1.5550. The Producer Price index month on month and year on year came in well under forecast which weakened the dollars value making it cheaper to purchase. These figures will again dent the hopes of the U.S Federal Reserve as they look for improvements in the U.S economy before cutting back their on going stimulus package.
With the UK economy showing continued signs of improvement and the U.S not performing the way the FED would like, there is a good chance we could continue to see the pound make further advances against the dollar. If things carry on improving it may not be unrealistic to think we could see GBP/USD rates push back over $1.60 in the coming months.
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