23 Jan 2014
GBP/USD loses some of yesterday's UK employment momentum
FXstreet.com (London) - GBP/USD retraced some of yesterday's momentum on a bigger than expected drop in ILO unemployment statistics.
UK unemployment drops further than expected
UK unemployment dropped to 7.1 percent, overshooting expectations of a decline to 7.3 percent. With unemployment dropping to within a hair's breadth of the Bank of England's 7.0 percent target before it considers hiking rates, there had been some scrutiny of the language surrounding the BoE's announcement for clues as to the central bank's future interest rate stance.
Although there has been some speculation that the BoE might move the goal posts for a future rate hikes from 7.0 percent to 6.5 percent, BoE governor Mark Carney has instead stood by his previous stance that the 7.0 unemployment rate represents a threshold rather than a trigger point.
Inflation focus
Yesterday's unemployment statistics showed a record jump in the UK claimant count, down 0.9 percent. However, with wage growth still running at 0 9 percent compared to CPI of 2.0 percent, real wages remain under pressure, threatening UK co Sumer spending and business confidence.
The only UK macro data due today is the CBi January reported sales with expectations of a drop from 34 to 25.
The biggest influence on the pair this morning's session will come from BoE MPC member Paul Fisher's speech at 9AM GMT. Markets will be scrutinising Fisher's speech for any suggestion of a change in BoE forward guidance.
GBP/USD is currently trading at USD1.6566, down 0.07 percent on the session so far. Although the CBI report may present some downside risks for GBP/USD, the biggest downside may come from corrections on yesterday's bullish move.
UK unemployment drops further than expected
UK unemployment dropped to 7.1 percent, overshooting expectations of a decline to 7.3 percent. With unemployment dropping to within a hair's breadth of the Bank of England's 7.0 percent target before it considers hiking rates, there had been some scrutiny of the language surrounding the BoE's announcement for clues as to the central bank's future interest rate stance.
Although there has been some speculation that the BoE might move the goal posts for a future rate hikes from 7.0 percent to 6.5 percent, BoE governor Mark Carney has instead stood by his previous stance that the 7.0 unemployment rate represents a threshold rather than a trigger point.
Inflation focus
Yesterday's unemployment statistics showed a record jump in the UK claimant count, down 0.9 percent. However, with wage growth still running at 0 9 percent compared to CPI of 2.0 percent, real wages remain under pressure, threatening UK co Sumer spending and business confidence.
The only UK macro data due today is the CBi January reported sales with expectations of a drop from 34 to 25.
The biggest influence on the pair this morning's session will come from BoE MPC member Paul Fisher's speech at 9AM GMT. Markets will be scrutinising Fisher's speech for any suggestion of a change in BoE forward guidance.
GBP/USD is currently trading at USD1.6566, down 0.07 percent on the session so far. Although the CBI report may present some downside risks for GBP/USD, the biggest downside may come from corrections on yesterday's bullish move.