- Pound Rises on Solid Labor Data
The British Pound gained after data showed wages grew more than forecast in the second quarter and unemployment rate improved to its lowest in more than 40 years.
The U.K. wage growth rose 2.1 percent in the second quarter, year-on-year. However, it still lagged behind inflation rate, according to the Office for National Statistics report released on Wednesday.
Also, the unemployment rate improved from 4.5 percent in the first quarter to 4.4 percent in the second quarter. The lowest since 1975.
The solid data boosted the pound attractiveness against its counterparts.
Pound gained 0.2 percent against both the Euro-single currency and the US dollar after the data was released to trade at 0.9100 and 1.2890, respectively.
“The currency is likely to remain firm this morning,” Neil Jones, head of hedge fund sales at Mizuho, said in emailed comments. “However, I suggest the upside for sterling will prove limited”
Another expert, Viraj Patel, a currency strategist at ING Groep NV said Sterling gain could prove temporary. “Any knock-on effects for BOE policy are minimal” from the labor data, and “short-term U.K.-U.S. rate differentials will remain the key driver” for cable.”
