Positive UK Data Revives Interest in Pounds
by Latisha Liming
The GBP value in the forex market has been losing in the last few sessions as USD strengthened. The recent economic data from the UK has made the investors happy. The UK employment has reached 120K expansion and core household wages have also improved. The short-term rebound of the GBP/USD pair is imminent in the market. As Pound gains significance in the market, the Bank of England may be keen on normalizing the monetary policy.
Mark Carney, the governor of BoE has issued some hawkish comments in the recent past. He wants the monetary stimulus to be removed in order to support economic growth. However, not all members of the Monetary Policy Committee (MPC) share the same opinion. The officials have trust on their projection that says that the economy is expected to operate only with a spare capacity for the next three years.
The UK employment rate was expected to increase by 120K in May. The average hourly earnings excluding bonuses are also likely to increase since last November. The market officials, however, want the BoE to continue with the same monetary policy because the economy is experiencing its slowest growth in recent times.
The positive forecast is expected to help the GBP to recover its losses against the USD. The British economy has a long way to go, but any strengthening of the Sterling is expected to make the economy grow stronger. The market watchers are closely watching the moves of BoE to see whether monetary stimulus recedes.
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