UK unemployment and Sterling Exchange Rates
This morning we have heard the latest set of unemployment data from the UK which is one of the key economic data sets. Several months ago Mark Carney, Governor of the Bank of England (BoE) stated that should unemployment fall before 7% they would consider raising interest rates and despite since going back on this and stating that hitting 7% does not guarantee an interest rate hike it is still seen as a key economic indicator for the UK and therefore is very important for Sterling exchange rates. Well, the news this morning is that UK unemployment figures fell to 6.9% which is more great news for the UK and adds to the pressure on the BoE to hike interest rates which means we could see a strong reaction for Sterling to this news, in fact the Pound is already up at the time of writing and that trend could continue. This is a big drop in unemployment and coupled with the positive economic growth we have seen recently means the UK is still on the path to economic recovery.
In the meantime the next big data release for the day is the latest Eurozone inflation data which is expected to show another drop and if this is the case then we really could see Sterling Euro exchange rates spike up to the high levels we have seen this year. The expectation is for the rates to fall from 1% to 0.8% and any fall more than this could spell good news for EUR buyers but bad news for the Eurozone economy as talk of deflation will be back on the cards. For anyone with a Euro currency transfer to make this data set at 10am today will be key.
We can expect this mornings news to continue to filter into the market over the course of the day and so it could remain very volatile for Sterling for the rest of the day. So, if you need to transfer funds internationally it will be worth speaking with an experienced currency broker who will be able to discuss your requirements, the options available to you and the market outlook so you can make an informed decision as when best to buy your currency.