HiFX, comments on the latest wage and unemployment figures
Andy Scott, associate director of FX advisory services at foreign currency specialists, HiFX, comments on the latest wage and unemployment figures.
Andy said: “Sterling dropped back on Wednesday following employment data that was weaker than expected, raising questions about the strength of the economy. Having risen by over one percent following comments from the Bank of England Governor yesterday on a rate rise moving closer, GBP/USD and GBP/EUR dropped by 0.5% to 1.5600 and 1.4150 respectively.
“Any signs that job creation is slowing is likely to temper expectations of the recent wage growth continuing, and could therefore weaken the argument made by a couple of BoE members that rates will need to be increased soon. We’ll need to see how June’s employment figures look, but if unemployment starts to tick up or wage growth stalls, Mark Carney may end up having to retract the comments about a rate rise moving closer, just as he did had to do last year.”