Earlier during Tuesday trade in London, the Pound Sterling had hit a 22-month high on raised hopes that the latest strong earnings reports would cement the Bank of England’s position that an interest rate hike in the coming months is simply a formality. Broad Dollar weakness was also helping to list the Pound even as waning concerns over the outcome of the Brexit negotiations have provided some positive momentum. Currently, the Pound is under a bit of pressure from the latest mixed data which showed a drop in the unemployment rate, and a miss on claimant count and average earnings.
As reported at 11:03 am (BST) in London, the GBP/USD is trading at $1.432, down 0.12% and well off the earlier session peak of $1.4377 while the low is at $1.4313. The EUR/GBP is trading at 0.86422 Pence, a gain of 0.0518%; the pair has ranged from a session low of 0.86274 Pence to a peak of 0.86489 Pence.
Bank of England Position Questioned
Analysts say that today’s economic data could lead to increased investor uncertainty because the Bank of England had already said that a rise in wage pressures would need to be seen before a rate hike is factored in as a tool to curb inflation. It had been forecasted that average earnings including a bonus would rise to 3.0% in the 3-month period to February, but the actual numbers were flat at 2.8%. For wages which didn’t include a bonus there was some growth to 2.8% as analysts had predicted a flat 2.6% reading.