Daily digest market movers: Pound Sterling strengthens on multiple tailwinds
- The Pound Sterling extends its winning spell for the third trading session on Wednesday. The Cable capitalizes on the soft US Dollar and uncertainty over when the Bank of England (BoE) will opt for interest-rate cuts. Currently, investors anticipate that the central bank will start to do so from the June meeting.
- The United Kingdom Employment report for the three months ending March, which was released on Tuesday, indicated that job market conditions deteriorated for the third time in a row. Due to rising joblessness, the Unemployment Rate rose to 4.3% as expected. Historically, easing labor market conditions boost expectations for the central bank to adopt a dovish stance on interest rates. However, the impact of this loosened labor market was offset by steady wage growth.
- BoE policymakers remain concerned over high service inflation as it could stall progress in the disinflation process. Services inflation is majorly driven by wage growth, which appears to be significantly stronger than what is required for inflation to return to the desired rate of 2%.
- After the labor market data, BoE Chief Economist Huw Pill commented: "Rates of pay growth remain quite well above what would be consistent for meeting the 2% inflation target sustainably." Pill emphasized the need to maintain a restrictive stance on monetary policy that continues to build downside pressure on domestic inflation. About rate cuts, Pill said that it is reasonable to believe that over the summer, “we will see enough confidence to consider lowering interest rates.”
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
FOLLOWME Trading Community Website: https://www.followme.com
If you like, reward to support.
Hot
No comment on record. Start new comment.