Forex News
March 20, 2013 @ 11:28 am

Pound surges after upbeat UK employment data

The British pound surged against the dollar in reaction to upbeat UK data on Wednesday and also after the Bank of England’s MPC voting details. GBPUSD recovered losses made early in the London session when the pair fell to a low of $1.5026 and subsequently rose after the jobs data to $1.5144, higher than the session open price of $1.5088.

Official data showed much better-than-expected UK employment data, which reported the lowest claimant count level since June 2011, giving hope for a better recovery. The official unemployment rate remained unchanged at 7.8 percent.

The data comes ahead of a key budget announcement by British finance minister, George Osborne, due to speak at 1230GMT.

Meanwhile, in addition to the employment data, a separate report was released showing the MPC meeting minutes of the Bank of England policy meeting earlier this month. The voting pattern indicates no new MPC members voted to add to stimulus.

But there seems to be a little bit of concern about a weaker pound by the policymakers and this appears to have been the reason BOE governor said on a television interview last week that he believes that the pound had fallen far enough.

Peter Dixon, analyst at Commerzbank made the following comments on the MOC minutes:

“They were as anticipated and I suspect that the MPC is waiting to see whether any mandate changes will be announced in this afternoon’s budget. If we get a situation where there’s a little bit less emphasis placed on inflation following the Chancellor’s speech then it may persuade one or two of the waverers, who are concerned about the QE impact on inflation to change their views. So the

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