UK unemployment figures have fallen to 6.5% this morning lending support to the pound which pushed to a two year high against the Euro and a near six year high against the US dollar. These figures were forecast but continues the positive run for the labour market and gives more scope for the Bank of England to raise interest rates, with some analysts forecasting this could happen as soon as Q4 of this year and it is this that is likely to keep sterling moving in a positive direction.
Today’s figures were the last of the major data sets from the UK this week and the next major focus will be the Bank of England minutes next Wednesday. This report will give the full breakdown of the Banks last interest rate meeting, including the split across the nine members of the monetary policy.
Looking at the Euro and tomorrows inflation figures should be watched. The Euro Zone is still coming under pressure from deflation and should levels fall further I would look for a negative shift for the Euro.
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