European Session – Pound rallies on big drop in unemployment
January 22, 2014 2:41 pm
The pound was the currency that rose the most during today’s European session as unemployment in the UK dropped to within striking distance of the Bank of England’s threshold in order to consider an interest rate hike.
The September-November unemployment rate dropped to 7.1% compared to expectations of a rate of 7.3%. The previous reading was 7.4%. At the same time when unemployment was announced, the Bank of England meeting minutes were also released. The minutes showed that the Bank was not going to be quick in raising interest rates despite the fact that unemployment was already fast approaching the 7% threshold adopted during the summer of 2013.
Sterling rallied, gaining 0.63% against the US dollar to trade at 1.6576. Sterling was very close to the January 2 high of 1.6590. It also broke through the psychologically important 82 pence level against the euro, as the euro dropped 0.46% to trade at 0.8188.
The euro however managed to gain an edge over the dollar, as it rose 0.14% to 1.3573. There were no significant economic data out of either the United States or the Eurozone. That would change tomorrow when Markit flash PMI figures will be released for the Eurozone and existing home sales and house prices will come out of the United States.
The dollar was little changed against the yen at 104.42, although the euro gained some ground against the Japanese currency, rising by 0.15% to 141.76. The Bank of Japan maintained its ultra-easy monetary policy earlier in the day and was optimistic that it would meet its 2% inflation target in 2015.
The Australian dollar stabilized after substantial gains during the Asian session following an acceleration of inflation during the fourth quarter in Australia. The aussie extended its gains by 0.05% against the US dollar to trade at 0.8867.
It was also the opening day of the World Economic Forum in Davos, Switzerland. Among other delegates, Japanese Prime Minister Shinzo Abe, US Treasury Secretary Jack Lew, the chiefs of the ECB and the BoE Mario Draghi and Mark Carney are scheduled to attend and address the proceedings. The Congress concludes on Saturday.
The pound was the currency that rose the most during today’s European session as unemployment in the UK dropped to within striking distance of the Bank of England’s threshold in order to consider an interest rate hike.
The September-November unemployment rate dropped to 7.1% compared to expectations of a rate of 7.3%. The previous reading was 7.4%. At the same time when unemployment was announced, the Bank of England meeting minutes were also released. The minutes showed that the Bank was not going to be quick in raising interest rates despite the fact that unemployment was already fast approaching the 7% threshold adopted during the summer of 2013.
Sterling rallied, gaining 0.63% against the US dollar to trade at 1.6576. Sterling was very close to the January 2 high of 1.6590. It also broke through the psychologically important 82 pence level against the euro, as the euro dropped 0.46% to trade at 0.8188.
The euro however managed to gain an edge over the dollar, as it rose 0.14% to 1.3573. There were no significant economic data out of either the United States or the Eurozone. That would change tomorrow when Markit flash PMI figures will be released for the Eurozone and existing home sales and house prices will come out of the United States.
The dollar was little changed against the yen at 104.42, although the euro gained some ground against the Japanese currency, rising by 0.15% to 141.76. The Bank of Japan maintained its ultra-easy monetary policy earlier in the day and was optimistic that it would meet its 2% inflation target in 2015.
The Australian dollar stabilized after substantial gains during the Asian session following an acceleration of inflation during the fourth quarter in Australia. The aussie extended its gains by 0.05% against the US dollar to trade at 0.8867.
It was also the opening day of the World Economic Forum in Davos, Switzerland. Among other delegates, Japanese Prime Minister Shinzo Abe, US Treasury Secretary Jack Lew, the chiefs of the ECB and the BoE Mario Draghi and Mark Carney are scheduled to attend and address the proceedings. The Congress concludes on Saturday.
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