Sterling lost ground against its major trade partners yesterday as economic data from the UK failed to support the currency. Labour data released in the morning showed that the unemployment rate had fallen, as predicted, to 6.8%. Despite this positive news, the number of people claiming unemployment benefits was higher than expected, which saw sterling tumble in advance of the Bank of England (BoE) inflation report. On the back of this report, and the accompanying press conference by BoE Governor Mark Carney, sterling remained unsupported. Although the central bank acknowledged the strength in the labour market, it left its growth and interest rate change forecasts unchanged, resulting in sterling weakness.
With Carney’s comments definitively arresting the recent strong performance of sterling, and with no major economic data from the UK through the rest of the week, sterling sellers will be hoping for poor economic data from elsewhere to drive the pound’s value back up.
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