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Sterling Recovery Gathering Pace

Sterling Recovery Gathering Pace

The British Pound rallied in the wake of a strong labour market reading that increased the prospects of a Bank of England interest rate rise in December. Labour market statistics for the September period came in well ahead of expectation, while statistics covering the crucial post-furlough month of October also revealed a surge in unemployment was unlikely. 

The Pound had been rising ahead of the jobs report thanks to an appearance of members of the Bank of England in parliament, where they said an interest rate rise could occur at any of the upcoming Monetary Policy Committee meetings. The jobs report gives encouragement to the view that the Bank will feel confident enough to lift rates from emergency settings, in either December or February.

Overall, the weaker euro over the past 24 hours sees EUR/ USD open this morning below the $1.14 threshold, at $1.137, representing a new year-to-date low. Meanwhile, GBP/EUR has pushed through last week’s levels of 1.1670. It is now in the range of 1.1830 with a closer timeline for an interest rate hike for the UK. compared to the US.

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