Sterling had another strong day yesterday, forging further upwards against all of its most-traded partners. The UK currency came close to the recent two and a half year highs experienced against the US dollar, while also posting fresh one year highs against the euro.
These surges came early on, with the unemployment rate figure dropping to 7.1% having been predicted to be 7.3%. This unexpected improvement towards the Bank of England (BoE)’s 7% target caused sterling to spike and steadily increase a touch more throughout the afternoon. 7% is the level at which the BoE had said they would consider raising interest rates, hence the strengthening of sterling. However, market talk has suggested that the BoE may lower this threshold due to the pace of the rate decline, and minutes released yesterday even showed that policy makers saw no need to hike interest rates in the near future, so businesses may have a while to wait before borrowing costs increase.
Today is scheduled to be a calmer one for sterling, with just the Confederation of British Industries’ realised sales due, along with speeches from some Monetary Policy Committee members.
Thinking about buying or selling sterling? Get in touch with your trader now for the latest rates, as positive data keeps coming.