Today’s employment data from the United Kingdom and the minutes of the latest Bank of England’s policy meeting suggested that there likely will not be an interest rate hike in the near future. Hopes for monetary tightening were a key component for the strength of the Great Britain pound, and the currency has been weakening as chances for an early rate hike were waning.
The employment report released during the current trading session was mostly disappointing with average wage growth that trailed expectations and the unemployment rate that stayed unchanged even though economists promised a decrease. Meanwhile, the BoE minutes showed that the vote for keeping monetary policy unchanged was unanimous. All these reports suggest that early monetary tightening is unlikely, depriving the sterling of its major supporting factor.
GBP/USD dropped from 1.4743 to 1.4671 as of 11:06 GMT today, trading near the lowest level since June 2010. GBP/JPY slid from 178.90 to 177.34.
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