UK unemployment fell to the lowest level since 2005 on Wednesday, enabling sterling to recoup much of the ground lost during trading on Tuesday. Reassuringly positive labour data on Wednesday also showed that average earnings over the previous quarter had increased as expected, whilst unemployment fell to just 4.9%. With the Bank of England (BoE) determining that there is currently no evidence of a sharp slowing of activity in the wake of the EU referendum, sterling markets rallied across the board in response to a lower chance of significant monetary policy easing in August. However, sterling still remains vulnerable, and only further economic data will determine whether trouble lies ahead for the UK economy and therefore for sterling.
The first of these data shocks may come today as we have the release of retail sales data from the UK. With a decline of -0.4% already forecast, any further slowdown in consumer spending may see sterling suffer.
If you are looking to buy or sell sterling, we suggest contacting your trader now for live rates, news and currency-purchasing strategies.