For the second day in a row,the GBP bulls went to work, as pound pairs found themselves hitting two-week highs! The GBPUSD closed at 1.5326, up over 70 pips for the day.
The rise of the pound was due to some encouraging data released yesterday. First, the UK labor market finally got some good news, as the Claimant Count change report came in much better than expected. The report indicated that the number of people who filed for unemployment benefits fell by 32,300 after consensus was for a rise of 8,200. Furthermore, last month’s claims were revised down from 23,500 to just 5,300!
Also released yesterday was the minutes of the latest MPC meeting. One interesting issue that was brought up in the MPC minutes was the issue of new inflation risks. Rising inflation? Is it time for a rate hike!? Not so fast my young padawans – the BOE is still pretty cautious about the overall state of the economy. The BOE needs to see more signs before they will even begin to whisper the possibility of a rate hike.
On deck today, we’ve got the Public Sector Net Borrowing account figures due at 9:30 am GMT. The account measures how much the government has been spent or saved in the past month. It is expected that a deficit of £14.6 billion will be posted.
Later on at 11:00 am GMT, the CBI industrial orders expectations index is scheduled for release. Forecasts are for a score of -33, still below the baseline 0 mark. However, the index has been showing improvement over the past few months. If we see a much better than expected reading, who knows what might just happen in the markets… Another round of pound buying perhaps?