Increased earnings give Sterling a boost (+ video)

Currencies Direct February 19th 2015 - < 1 minute read

The pound performed well yesterday following robust employment and earnings data. The unemployment rate fell to a six-year low of 5.7% and the number of people claiming benefits declined more than expected. However it was an increase in earnings that gave the pound a boost. In the three months leading up to December, earnings rose 2.1% beating expectations of a 1.7% increase and much higher than the rate of inflation. The rise in earnings or wage inflation will be a key driver behind momentum to raise interest rates.
Last night, the US Federal Reserve delivered the minutes from its January meeting. The tone of the minutes was dovish, with expectations that the Fed will lower its rate projections at the March meeting. However, the minutes’ feedback will not have included the strong labour market report in early February. US data over the next month will be key in reviewing how close the US are to a rate increase. The dollar was quiet on the release of the minutes as the market adopts a "wait and see" approach. Today we have US initial jobless claims, which will give further feedback on the labour market.
Elsewhere today, we have Eurozone consumer confidence which is expected to improve. In addition we have the minutes from the ECB's January meeting where they announced a 1.1 trillion QE package for the Eurozone.



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