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The news allowed the GBP/USD cross to climb to $1.2682, however the gains have been short-lived as markets await the result the Federal Reserve announcement this evening, and at the time of writing GBP/USD is trading back $1.2630.
GBP/USD graph
Unemployment still falling.
Figures produced by the Office for National Statistics this morning confirmed that UK unemployment had dropped by 16,000 to 1.62 million for the three months to October, while the unemployment rate remained unchanged at 4.8 per cent.
Average earnings, which excludes bonuses increased by 2.6 per cent in the year to October, beating forecasts and is slightly higher than last month's reading.
This morning's news is another positive for the UK economy, although it is widely anticipated the unemployment rate will increase next year as British companies will hold off from hiring while the uncertainty of Brexit hangs over the country.
Federal Reserve set for hike.
This evening will see the Federal Reserve announce its latest interest rate decision, with investors banking on Janet Yellen & Co raising the benchmark rate for the first time since December 2015.
With markets pricing in a 100 per cent change of a rate hike this evening, all eyes and ears will be on the announcement and the subsequent FOMC statement for clues about future hikes through 2017.
When the Fed raised rates last year they said there would be another four hikes throughout 2016, those hikes never materialised and I don't think Fed Chair Yellen will want to make the same promises this time round.
If Yellen takes a dovish stance about the Feds actions for next year we could see the dollar weaken, which in turn will push GBP/USD up. However, if she does announces plans for multiple rate rises in the New Year we could see the dollar strengthen across the board, forcing GBP/USD down in the process.
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