Employment Data Adds to Strength of Sterling

The Great Britain pound advanced today as macroeconomic reports from the United Kingdom were positive yet again. The employment data was especially good, adding to evidences that economic recovery is gaining momentum.

The number of people claiming Jobseeker’s Allowance fell by 32,600 in August, outpacing the forecast of 21,200. The unemployment rate unexpectedly dipped by 0.1 percentage point to 7.7 percent in August. The Conference Board Leading Index rose by 0.7 percent in July after falling 0.3 percent in June.

The Bank of England targets the 7 percent unemployment rate as a threshold for considering tightening of monetary policy. Analysts do not think that this level will be reached this or even next year, but it is good to see that the indicator moves in that direction.

GBP/USD advanced from 1.5731 to 1.5771 as of 11:10 GMT today, while the daily high of 1.5825 was the highest since February 8. GBP/JPY traded at 158.25 after rising from 157.90 to 158.52 — the strongest price since August 2009. EUR/GBP from 0.8431 to 0.8404, reaching 0.8381 — the lowest rate since January 23.

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