020 7898 0500Sterling started the week positively following comments from the Chancellor of the Exchequer George Osborne who unsurprisingly showed support for the economy and suggested it was turning a corner and was in the early stages of a recovery. Drastic movements were limited, however, due to the lack of influential data to impact on the strength of the currency. This changed on Wednesday, when it made strong gains against the majority of its major counterparts, thanks to better than expected unemployment data. The fact that the rate dropped to 7.7% – edging nearer to the 7% target for the Bank of England to consider an interest rate hike – helped the pound to reach 7 and 8 month highs against the US dollar and euro respectively. While the Bank of England said higher interest rates won’t be seen until the 4th quarter of 2016, this unemployment drop coupled with positive economic data caused investors to question this timeframe. Yesterday, however, Mark Carney reiterated that the rate hikes were dependant on a lower unemployment rate – however this caused little reaction in the market. Today could wind down the week in a quiet fashion, with no data at all due from the UK, and as such any movements are likely to be due to external developments. Call your trader now for the latest price on sterling, after another week with significant implications.
