The UK's strengthening economy has demonstrated that the recovery is "finally taking hold". On Wednesday, the Bank of England said Britain’s unemployment rate is falling much faster than previously forecast.
Expectations were for unemployment rates to drop to 7 percent after a period of several years. With the current unemployment rate at 7.6 percent for Q3 the Bank of England is now stating that unemployment could hit the 7 percent target as early as October of 2015.
BOE Governor Mark Carney commented on the country’s economic recovery after the bank’s report stating that, “For the first time in a long time you don't have to be an optimist to see the glass is half full."
Carney lowered interest rates to a record low of 0.5 percent in August, with the mindset that the rate would hold until a 7 percent unemployment rate was achieved.
John Hardy, Head of FX Strategy at Saxo Bank, says there's "no need" to worry about interest rates if inflation is so low. Both the MPC and Carney reiterated this sentiment stating that interest rates are not set to increase anytime soon regardless of the fact that the country may achieve 7 percent unemployment within 2 years.
After the Bank of England’s announcement sterling’s price saw an increase. Hardy stated that structural issues are still present for the currency, which is being driven by consumption. Possible support stems from the fact that banks around the world hold a more dovish perspective while the Bank of England remains neutral.
Expectations were for unemployment rates to drop to 7 percent after a period of several years. With the current unemployment rate at 7.6 percent for Q3 the Bank of England is now stating that unemployment could hit the 7 percent target as early as October of 2015.
BOE Governor Mark Carney commented on the country’s economic recovery after the bank’s report stating that, “For the first time in a long time you don't have to be an optimist to see the glass is half full."
Carney lowered interest rates to a record low of 0.5 percent in August, with the mindset that the rate would hold until a 7 percent unemployment rate was achieved.
John Hardy, Head of FX Strategy at Saxo Bank, says there's "no need" to worry about interest rates if inflation is so low. Both the MPC and Carney reiterated this sentiment stating that interest rates are not set to increase anytime soon regardless of the fact that the country may achieve 7 percent unemployment within 2 years.
After the Bank of England’s announcement sterling’s price saw an increase. Hardy stated that structural issues are still present for the currency, which is being driven by consumption. Possible support stems from the fact that banks around the world hold a more dovish perspective while the Bank of England remains neutral.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.