Апреля 24, 2018

At $1.43, Sterling hits post-Brexit referendum high

17 Апреля 2018, 04:26 | Taylor George

GETTYBrexit news Germans want EU to be firm and offer UK no compromise during negotiations

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-First "real wage" increase in 12 months seals deal on BoE rate hike.

At 4.30 am ET Tuesday, the Office for National Statistics is slated to issue United Kingdom unemployment data for three months to February.

Markets had been looking for wage growth of 3% so the number comes as a disappointment for some although, despite this, it is still significant. The figures mean that United Kingdom workers are now getting a small real wage rise on average. "Pay growth appears to be finally benefiting from the strength of jobs growth", says Ruth Gregory, a United Kingdom economist at Capital Economics.

The headline unemployment rate, which measures the percentage of the British workforce who want a job but don't have one, fell from 4.3% to 4.2%, marking a second consecutive month of a dropping headline jobless rate. "The unemployment rate fell, too, and is at its lowest since 1975". Accordingly, this has implications for interest rates as it's inflation that central banks are attempting to manipulate when they tinker with rates. "Markets are now pricing in an 85 percent chance of a rate rise".

Sterling pared back earlier gains and sank to a fractional loss against its developed world rivals in response to the report Tuesday.

The pound gained more than 0.2% to $1.437, beating a previous post-Brexit-vote high set in January.

Rising to $1.4364 by today morning, the pound has hit its highest level against the dollar since the Brexit vote in June 2016 amid hopes that the United Kingdom and European Union can avoid a hard Brexit and strike a deal. With unemployment at its lowest level since the 1970s, employers have begun raising pay for staff more quickly, though by less than increases of about 4 percent a year before the financial crisis.

Читайте также: Analyst Earnings Forecast Scan: Apple Inc. (AAPL)

You can track the value of the pound with Markets Insider.

Sterling was flat against the euro. He could be right.

Meanwhile, the United States dollar has been coming under pressure over fears of a trade war. Meanwhile, the British currency actually posted a minor loss against the Euro past year.

The pound's value could rise even further this week if data out this week paints a rosy picture of the United Kingdom economy.

There was also good news for wage growth, with wages growing at 2.8% over the period. The next reading is due on Wednesday 18, April.

United Kingdom unemployment rate falls once again, dropping from 4.3% to 4.2%. What is clear however, is that a failure to raise rates in May will be bad for Pound Sterling.

Sterling has been boosted by expectations that the Bank of England will raise interest rates.

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