Pound Sterling Improves on Best UK Jobs Data Since 2005

June 15, 2016 - Written by John Cameron

STORY LINK Pound Sterling Improves on Best UK Jobs Data Since 2005

GBP/EUR Exchange Rate Reached Weekly Highs following UK Labour Market Data

With the Brexit vote eight days away, some might put it down to fortuitous timing, others might not be so kind; either way, the publication of official UK government statistics showing that domestic joblessness sank to its lowest level since 2005, out earlier, have helped support the Pound Sterling (currency : GBP) on the day.

The numbers, published by the Office of National Statistics (ONS) this morning, showed that the number of UK residents in work increased by 55,000, putting the overall rate of employment at 74.2%.

Perhaps the most encouraging element of the numbers was the increase in earnings, excluding bonuses, of 2.3% in comparison to twelve months ago when analysts had been forecasting an uplift of only 2.0%. The failure of domestic productivity to pick up during the aftermath of the 2007-09 global credit crisis has been dubbed ‘The British Problem’ by economists, so the suggestion that UK workers’ real wages are beginning to increase has come as positive news for Sterling-holders.

The Pound climbed against almost all of the other major global currencies during the aftermath of the release, sending the Pound euro exchange rate up to its highest level this week at 1.2670 GBP EUR. Meanwhile, the Pound US Dollar exchange rate edged higher to 1.4214 GBP USD.

Positive Chinese Lending Figures Boosted Trader Risk-Appetite

Elsewhere, global investors sentiment has improved drastically since yesterday’s sharp dip lower for share markets, with London’s benchmark FTSE 100 trading up by 1.17% just before the closing bell. May’s edition of the closely-monitored ‘New Yuan Loans’ data from China beat expectations, showing at CYN985.5 bn versus an anticipated CYN750.0 bn.

The far stronger than expected result from Asia’s premier economy has prompted hopes that economic conditions in the region are beginning to improve once more. Analysts forecast that Asian investor sentiment could receive a further boost if the Bank of Japan opts to further loosen its already ultra-loose monetary policy tonight.

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