GBP/EUR BREAKS THROUGH 1.22 (0.8195) ON UNEMPLOYMENT DATA UK unemployment rate plunged to 7.1%, its best reading in nearly 5 years, propelling pound to fresh weekly highs. The UK labor statistics were much better than the anticipated rate of 7.3%. The decline in the unemployment rate now puts it within a whisker of the BoE threshold of 7.0%, although the UK central bank was very quick to note that there is no immediate need to raise short term rates even if the threshold is breached. Although the UK labor data was impressive, there were some notes of concern that are likely to keep BoE stationary for the time being. UK claimant count did not drop as much as expected contracting only by -24K versus -33.8K eyed and average earnings rose a paltry 0.9% versus 1.1% forecast suggesting that wages remain depressed for the time being.
Posted on: Wed, 22 Jan 2014 12:00:56 +0000
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