Pound Stays Resilient After Fed, Helped by Employment Data

The Great Britain pound was little changed today following yesterday’s massive gains. The rally was caused by very good employment data from the United Kingdom, but was spoiled to a degree by the policy announcement of the US Federal Reserve.

The number of Britons seeking unemployment benefits fell by 36,700 from October to November, exceeding analysts’ expectations of 35,200. The unemployment rate unexpectedly fell from 7.6 percent to 7.4 percent. The Bank of England has set 7 percent as a level of unemployment at which the bank will start considering tighter monetary policy.

Of course, the sterling could not ignore quantitative easing tampering by the Federal Reserve, trimming its gains versus the dollar. Yet Britain’s currency demonstrated healthy resilience and did not move very far down at the start of today’s trading session.

GBP/USD was down a little from 1.6389 to 1.6373 as of 1:24 GMT today after yesterday’s rally to 1.6483. GBP/JPY jumped from 166.94 to 170.87, the strongest settlement since October 2008, but retreated to 170.44 today. EUR/GBP ticked up to 0.8349 on the current trading session following the slump from 0.8463 to 0.8346 on the previous session.

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