020 7898 0500Sterling reversed recent losses against its major trading partners on Wednesday following the release of surprisingly positive employment data from the UK. A tough start to the day saw sterling continue to struggle across the board, with investor sentiment largely against the currency. However, the early morning release of labour data saw sterling benefit as unemployment fell to 5.5% for the first time in 3 months.
A better-than-expected increase in average earnings to 2.9% was also warmly welcomed as investors moved to back sterling. With Bank of England (BoE) members speaking to parliament at the inflation report hearings, sterling found further support as a number of committee members suggested that interest rates may need to increase in the short-term in order to keep inflation in check.
This morning’s data will provide insight into UK retail sales throughout August. A modest increase of 0.2% is forecast compared to last year’s figures. Should we see this beat expectations, sterling could be set to make further gains. And then we have the main event of the day late this afternoon, the Federals Reserves decision on US interest rates. Expect sterling to move both in the build up to their decision and after their decision. Which way is impossible to forecast so please manage your risk effectively.
