The pound received a massive lift this morning after figures revealed UK unemployment had fallen again, while wage growth had risen to its highest level in nearly four years.
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The unexpected news saw Sterling rise across the board and pushed GBP/USD to its highest level since 15th May. When markets opened this morning GBP/USD was sitting at 1.5632 but after a gaining three quarters of a per cent the currency pair reached the dizzy heights of $1.5752.
The latest move has now seen pound gain around 2.3% against the dollar in the last eight days, climbing from $1.5394 last Wednesday.
Good news for the UK economy
This morning's numbers showed the number of people out work had fallen by 43,000 between February and April, keeping the jobless rate at 5.5%. With wage growth climbing 2.7%, the biggest rise we have seen since August 2008 there is finally some positive news for what seemed to be a flagging economy.
What today's data releases have done is also bring the Bank of England back to the table in terms of interest rates. With wage growth rising and unemployment falling the only thing preventing the central bank from increasing their benchmark rate is the current UK inflation level.
It will be interesting to see if Bank of England Governor Mark Carneys drops any hints about interest rates when he speaks this evening, especially after what should be seen as a positive step for the UK economy.
Watch out for the FED.
After a two day meeting the U.S. Federal Reserve will deliver their eagerly anticipated economic projections and statement this evening.
If you are looking to buy or sell dollars it is worth keeping an eye on the announcements as they have the ability to sway the FX markets. While no one is predicting a rate rise this evening there is every chance Janet Yellen could give a definitive timeframe as to when the FOMC could start to act.
Any positive comments could easily wipe away the gains the pound has made during today's session which will be great news for those of you looking to sell dollars.
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