Sterling Rises on Sturdy UK Jobs Figures
On Tuesday, Sterling rose after robust employment data highlighted a healthier picture of the U.K. economy. It happened just as the Bank of England gets ready to discuss a possible interest rate cut.
Meanwhile, the GBP/USD pair traded at $1.3047, above 0.3% in the FX Market. On the flip side, the EUR/GBP pair stood at 0.8507, below 0.2%.
Today, official data are also published, demonstrating the number of people in employment soared by 208,000 to 32.90 million.
The upsurge happened only in the three months to November. It is the most significant increase since the three months to January 2019.
On the other side, the employment rate struck a record high of 76.3%.
Moreover, the unemployment rate of 3.8% persisted at its lowest possible level since early 1975.
Recently, several associates of the Bank of England’s Monetary Policy Committee, comprising Governor Mark Carney, have spoken about the requirement for more stimulus amid signals of a slackening economy.
Indeed, two representatives nominated for a cut to borrowing costs at the end of last year.
The BoE is due to reveal its next rates decision on January 30.
By the end of the first half of the year, the data may offer some food for thought, but traders still give a nearly 100% likelihood of a rate cut.
Yen In Demand As Virus Triggers Risk Disgust
Elsewhere, the Japanese yen is in demand as a safe-haven currency with the occurrence of the pneumonia-like virus in China has been triggering a risk aversion.
Meanwhile, the yen rose 0.2% versus the dollar in forex trading, with USD/JPY pair trading at 109.97.
The Chinese yuan has been plunging 0.6% against the greenback, along with the USD/CNY pair trading at 6.9072.
To add, the EUR/USD pair was at 1.1089, as well as the GBP/USD pair at 1.3005 in the foreign exchange market. It goes with the attention spinning to the month’s ZEW index for Germany and U.K. employment data out later.
The US Dollar Index Futures, which tracks the greenback versus a basket of other currencies, was mostly dull at 97.39.
However, the outbreak of the infection has spread from the central city of Wuhan, is still in its early phases.
So far, there have been four fatalities confirmed, but with the peak travel season during the Lunar New Year holidays looming, the risk that it could circulate further is escalating.
The shock of the 2002 SARS epidemic is still fresh in many minds. On that incident, more than 8,000 people across 37 countries were disturbed, with around 800 deaths.
Until now, the movements in the foreign exchange market have been relatively restrained, with traders quite upbeat about the situation.
