The Pound has just moved higher following some stronger UK wage and job figures.
The data showed that workers pay rose at the fastest pace in nearly 2.5-years. The average earnings in the 3-months up to end of January rose 2.8% versus an expected 2.6%. Furthermore, the data showed unemployment levels dropping even further to 4.3% (vs. 4.7% a year ago) which is the joint lowest since 1975.
Although yesterday’s inflation data missed forecasts, today’s figures have boosted the odds that the Bank of England will hike interest rates again in May. This comes on top on Monday’s news that a transition deal had been agreed with the EU. The market now feel the BoE can spread their wings a bit, as they’ll feel there’s less risk in them putting rates up now. Their current interest rate meeting concludes tomorrow and we will see their decision, voting pattern and meeting minutes tomorrow at midday. The market will closely assess the tone and voting pattern for further clues on whether a hike is even more likely in May.
As a result, we are close to a 2-mth high against the Euro and the USD is close to a fresh 1-mth high.